German Central Bank: A new rate hike is “necessary”

The German central bank urged the need to continue raising interest rates in the euro zone to combat high inflation in an economic region that is suffering from high prices on the background of the energy crisis and the war in Ukraine.

According to the Sky News website, Bank President Joachim Nagel said in a speech at a central bank seminar in Frankfurt that additional decisions to raise new interest rates are "necessary" to return the inflation rate to 2 percent, which is the rate considered acceptable by the European Union.

He added that the continued rise in interest rates in the euro zone will make it more difficult to stabilize prices and will increase the difficulties experienced by fiscal policy, which may threaten the inflation rate to remain high.

The President of Deutsche Bundesbank confirmed that he will continue to press for the European Central Bank not to retreat from the policy of raising interest rates and stabilizing prices, although this contributes to curbing economic growth.

Nagel expected the continuation of price hikes in Germany and the euro zone in the coming year, warning of delays in measures to confront this development.

The eurozone has been suffering for months from the phenomenon of high inflation due to the energy crisis resulting from Russia's cutting off energy supplies to the European Union countries against the backdrop of the policy of sanctions and counter-sanctions between the West and Russia due to the Ukrainian war.

While the inflation rate in the euro area rose last October by 10.7 percent, the German Federal Statistics Office announced a similar rise by 10.4 percent in the same month, compared to the previous September.

source agencies