The European Central Bank will continue to raise rates

Reading time:< 1 minute

The European Central Bank (ECB) will continue to raise interest rates, said Martins Kazaks, a member of the Governing Council of the ECB, reports Bloomberg.

“At this moment we see that inflation is at an unacceptably high level, and in Latvia it exceeds 20%”, said the ECB official in an interview given to the Latvian TV station TV3.

“The monetary policy has already become more restrictive since December: at the beginning, we reduced the support programs and in the last months we increased the interest rates, and we will continue this increase, with the aim of not allowing inflation to worsen”, said Kazaks, who he is also the governor of the Central Bank of Latvia.

He added that it would be much more painful to let inflation remain at a high level.

“To fight against inflation, we also need fiscal policy and structural policy”, Kazaks appreciated.

At its July 21 meeting, the European Central Bank raised interest rates for the first time in 11 years, indicating that further increases could follow in 2022, and announced a new bond-buying program to keep costs under control. loan of the most indebted countries in the euro area.

The ECB’s Governing Council decided to raise the interest rate on the deposit facility by 50 basis points, to zero, from minus 0.50%, in an effort to reduce the record level of inflation in the euro area. Also, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility were increased by 50 basis points, to the levels of 0.50% and 0.75%, respectively.