ECB Raises Key Interest Rates by **25 Basis Points**, Deposit Rate to **2.50%** Amid Inflation Concerns
| Pair | Now | Since publish |
|---|---|---|
| EURUSD | — | — |
- ECB hikes rates by 25 bps, deposit rate now 2.50%.
- Move driven by inflation fears and rising energy prices.
- Euro saw initial weakness against USD before slight recovery.
The European Central Bank (ECB) on Thursday increased its three main interest rates by 25 basis points, bringing the benchmark deposit rate to 2.50%, the main refinancing rate to 2.65%, and the marginal lending rate to 2.90%. This widely anticipated move, the second hike this year, was primarily driven by persistent inflation concerns, particularly those exacerbated by recent surges in energy prices and geopolitical tensions in the Middle East. The ECB reiterated its commitment to ensuring inflation stabilizes at 2% in the medium term, while also stating it is not pre-committed to any specific future policy path. Concurrently, the central bank revised its inflation forecasts upwards for 2027 and 2028, and its growth forecasts for 2026 and 2027. The euro initially sold off against the USD ahead of the announcement amidst a broader USD rally, before recovering slightly to 1.1618.