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Crypto Market News: The European Central Bank (ECB) on Thursday announced its decision to raise the three key ECB interest rates by 25 basis points. The bank’s Governing Council decision will mean the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 4.00%, 4.25% and 3.50% respectively. These rates will take effect from 21 June 2023. This comes at the back of the crypto market taking a slump following the US Federal Reserve’s hints on chances of raising rates later in 2023.
Also Read: Crypto Crash: XRP, Ethereum Leads Sell Off As Crypto Market Bleeds
The ECB reasoned the rate hike decision by citing the possibility of inflation remaining too high for a long time although it has been coming down. In reaction to the ECB rate hike, Bitcoin price rose on Thursday amid a 4.19% decrease over the last 24 hours. The European Central Bank took a similar decision during its May 2023 meeting, leading to an encouraging crypto market reaction.
ECB: Inflation Pressures Remain Strong
The ECB Governing Council forecasted a drop in inflation rate over the next two years. The ECB Council said in a statement:
“According to the June macroeconomic projections, Eurosystem staff expect headline inflation to average 5.4% in 2023, 3.0% in 2024 and 2.2% in 2025. Indicators of underlying price pressures remain strong, although some show tentative signs of softening.”
Going forward, the ECB said will look to take a ‘sufficiently restrictive’ stance when it comes to achieve the target of bringing inflation down to the 2% target in medium term.
Also Read: Binance’s BNB Chain To Announce Layer 2 Blockchain Solution
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