ECB to raise rates further

FRANKFURT – The European Central Bank reiterated yesterday its intention to continue to gradually raise its key interest rates further as the economic recovery gathers pace in the 12 countries that share the euro.

If the bank’s assumptions with regard to the economic outlook were confirmed, “a progressive withdrawal of monetary accommodation will be warranted,” the ECB wrote in its August monthly report published yesterday. Last week, the guardian of the euro raised its benchmark “refi” refinancing rate by a quarter of a percentage point to three per cent.It was the fourth such move since December and ECB watchers expect the bank to continue to raise eurozone borrowing costs in coming months in order to keep area-wide inflation in check.After the latest rise in interest rates, ECB rates “remain low in both real and nominal terms, money and credit growth remain strong and liquidity in the euro area is ample by all plausible measures,” the report said.With rates at three per cent, “the ECB’s monetary policy therefore continues to be accommodative,” the bank said.Nampa-AFPLast week, the guardian of the euro raised its benchmark “refi” refinancing rate by a quarter of a percentage point to three per cent.It was the fourth such move since December and ECB watchers expect the bank to continue to raise eurozone borrowing costs in coming months in order to keep area-wide inflation in check.After the latest rise in interest rates, ECB rates “remain low in both real and nominal terms, money and credit growth remain strong and liquidity in the euro area is ample by all plausible measures,” the report said.With rates at three per cent, “the ECB’s monetary policy therefore continues to be accommodative,” the bank said.Nampa-AFP