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ECB headquarters in Frankfurt am Main
Photo: Arne Dedert / dpa
With the fifth interest rate hike in a row, the euro monetary authorities are bracing themselves against the persistently high inflation.
The European Central Bank (ECB) is again raising the key interest rate in the euro area by 0.50 percentage points to 3.0 percent.
That was decided by the Central Bank Council on Thursday in Frankfurt am Main.
The so-called deposit rate, which banks receive when they park money at the ECB, will rise to 2.50 percent after the decision.
Since the ECB changed course in July, savers have benefited from rising interest rates for overnight and time deposits.
However, high inflation is reducing returns.
The central bank has not yet reached its goal with its interest rate hikes: another interest rate hike is already in prospect for the next monetary policy meeting on March 16th.
ECB President Christine Lagarde outlined this course back in December: “We have to go a long way.”
The ECB is aiming for an inflation rate of two percent in the medium term as the optimal level for the economy.
It's still miles away from that, even though inflation has been falling recently.
The inflation rate in the euro zone fell to 8.5 percent in January.
The rate has thus weakened for the third month in a row.
But that is not yet a signal of the all-clear: core inflation, which excludes volatile prices for energy, food, alcohol and tobacco, has recently remained stubbornly at 5.2 percent.
mic/Reuters/dpa