The ECB's governing council said its base deposit rate will rise from 0.75% to 1.5%, matching the record increase it implemented in September.
Concerned that rapid price growth is becoming entrenched, the ECB is raising borrowing costs at the fastest pace on record, with further rate hikes almost imminent as unwinding a decade's worth of stimulus will take it well into next year and beyond.
The central bank began its tightening program in July when it raised rates by 50 bps for the first time in 11 years.
The ECB is battling to curb soaring prices across the continent. Eurozone inflation hit a record high of 10% in September.
EUR/USD whipsaws on ECB comments
The ECB raised interest rates by 75 bps as expected, moving its benchmark rate to 1.5%. The ECB said it is committed to continue raising rates to ensure inflation returns to its 2% target.
However, on the unveiling of its balance sheet it so far still intends to continue to reinvest its maturing securities. It is essentially delaying its quantitative tightening, on its balance sheet front.
It could be a positive twist for equities as it leads to more liquidity, but it is negative for the euro, which explains the sudden drop versus the dollar.
The ECB raised interest rates by 75 bps as expected, moving its benchmark rate to 1.5%. The ECB said it is committed to continue raising rates to ensure inflation returns to its 2% target.
However, on the unveiling of its balance sheet it so far still intends to continue to reinvest its maturing securities. It is essentially delaying its quantitative tightening, on its balance sheet front.
It could be a positive twist for equities as it leads to more liquidity, but it is negative for the euro, which explains the sudden drop versus the dollar.
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