The European Central Bank (ECB) is poised to raise its policy rate in July and September, President Christine Lagarde said in a blog post on Monday.
“I expect net purchases under the [bond buy program] to end very early in the third quarter,” Lagarde wrote, confirming the end of the central bank’s quantitative easing program.
“This would allow us a rate lift-off at our meeting in July, in line with our forward guidance. Based on the current outlook, we are likely to be in a position to exit negative interest rates by the end of the third quarter.”
The ECB’s deposit rate is currently -0.5%, meaning banks are getting paid to take their money out of the central bank.
Lagarde added that normalization of the policy rate will continue after the September decision if inflation stabilizes at 2%. Headline inflation in the eurozone had reached 7.5% in April.
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