July 22,2022
Christine Lagarde, president of the European Central Bank, is navigating Europe’s foreign exchange union through a more challenging environment this week that includes rising prices, sluggish economic growth, and political unrest.
To combat the approaching 9% inflation rate in the eurozone, Ms. Lagarde is expected to announce the ECB’s first interest rate increase in more than ten years, lagging behind other central banks like the Federal Reserve.
She must also convince investors that a significant new policy program, which is likely to be presented on Thursday, can shield fragile Southern European countries from the possibility of skyrocketing borrowing costs as the ECB moves to raise rates.
Due to the need to balance these three goals, the bank must respond to rising inflation more gently than the Fed, thereby reducing its efficacy. Additionally, it suggests that the ECB might successfully raise interest rates for some borrowers while lowering or maintaining them for other debtors.
Source: NewsNCR
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