Suryaa Business Desk: The European Central Bank (ECB) has decided to keep key interest rates unchanged to maintain financial stability in the Eurozone. The European Central Bank (ECB) has decided to keep key interest rates unchanged to maintain financial stability in the Eurozone. The Governing Council of the ECB has unanimously decided not to make any changes in the benchmark interest rates in view of the changing economic conditions and uncertainty around the world. However, the ECB has expressed serious concern over the re-emerging threat of inflation for some time now.
The market has been warned that the upward pressure on prices is likely to intensify in the coming days and should be vigilant in this regard. The ECB president made it clear that the risk of a rebound in inflation is looming due to fuel price volatility and supply chain challenges in eurozone countries. As the prices of consumer goods are already higher than expected in many countries, it is believed that the monetary policy needs to be kept tight for a longer time. Despite the slowdown in economic growth, the central bank has made it clear that it will not take any hasty decision to cut interest rates until inflation is fully brought under control.
European equity and bond markets reacted mixed to the ECB's decision. While the banking sector got some relief as interest rates remained unchanged, rising inflation warnings worried the industrial sector. Economists are analyzing that the ECB will finalize its next course of action depending on the economic situation and inflation pattern of the Eurozone in the coming quarters.
