The European Central Bank raised its interest rates for the first time in over a decade on Thursday, by a bigger-than-expected 50 basis points, and unveiled an anti-fragmentation tool called the Transmission Protection Instrument, or TPI.
ECB President Christine Lagarde had said in June that the bank would hike interest rates by 25 basis points in July and follow up with a similar, or bigger, move in September if the macroeconomic outlook deteriorated.
"The Governing Council judged that it is appropriate to take a larger first step on its policy rate normalization path than signaled at its previous meeting," the ECB said in a statement.
"This decision is based on the Governing Council's updated assessment of inflation risks and the reinforced support provided by the TPI for the effective transmission of monetary policy."
by Jyotsna V
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