ECB boss reaffirms determination

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“We will ensure price stability and a reduction in inflation to 2 percent in the medium term is not negotiable,” the European Central Bank (ECB) President said in Frankfurt on Wednesday.

The urgent takeover of Swiss bank Credit Suisse by rival UBS and the difficulties faced by some smaller US institutions have also raised concerns about banks in the eurozone. Lagarde said the European banking sector is resilient thanks to its strong capital and liquidity positions.

Given the current market tensions, the ECB stands ready to support the financial system with liquidity support as needed and maintain the smooth transmission of monetary policy. “One thing is certain: there is no compromise between price and financial stability,” Lagarde said.

Despite turbulence in financial markets, the ECB raised the key interest rate by 0.50 percentage points to 3.5 percent last week. The central bank did not commit to the future. Lagarde made it clear that economic data will guide monetary authorities.

Euro monetary authorities aim for price stability in the euro area with an inflation rate of 2 percent in the medium term. This goal has been far away for months.

Inflation in the common currency, which was 8.6 percent in January, became 8.5 percent in February. Inflation was initially fueled mainly by higher energy and food prices. Meanwhile, the price increase is affecting more areas of life. (SDA)

Source :Blick