Summary
- Decided to raise the three key ECB interest rates by 75 basis points; accordingly, 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 1.25%, 1.50%, and 0.75% respectively, with effect from 14 September 2022. (change)
- This frontloads the transition from the prevailing highly accommodative level of policy rates towards levels that will ensure the timely return of inflation to the ECB’s 2% medium-term target. (Change)
- Expects to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations. (Change)
- Will regularly reevaluate its policy path in light of incoming information and the evolving inflation outlook. (Change)
- Inflation remains far too high and is likely to stay above target for an extended period. (Change)
- The latest staff projections for economic growth have been revised down markedly for the remainder of the current year and throughout 2023. (Change)
- Continue applying flexibility in reinvesting redemptions coming due in the pandemic emergency purchase programme portfolio with a view to countering risks to the transmission mechanism related to the pandemic. (Change)
- Further normalisation of interest rates will be appropriate and will make a transition to a meeting-by-meeting approach to interest rate decisions. (Change)
- Continue to be data-dependent, which will help to deliver on its 2% inflation target over the medium term. (Change)
- Following the raising of the deposit facility rate to above zero, the two-tier system for the remuneration of excess reserves is no longer necessary. The Governing Council therefore decided to suspend the two-tier system by setting the multiplier to zero. (Change)
- Intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates and, in any case, for as long as necessary to maintain ample liquidity conditions and an appropriate monetary policy stance. (No Change)
- Continue to monitor bank funding conditions and ensure that the maturing of operations under the third series of targeted longer-term refinancing operations (TLTRO III) does not hamper the smooth transmission of its monetary policy. The Governing Council will also regularly assess how targeted lending operations are contributing to its monetary policy stance. (No Change)
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