Again, projected ECB Will Raise Interest Rates to 1.75%

Foonie.com - JAKARTA - The European Central Bank (Europe Central Bank / ECB) finally decided to raise benchmark interest rates by 25 bps to 1.25 percent. This increase is the ECB for the first time since the last three years. Steps that had been predicted analyst since a few days following the inflation pressure to 2.6 percent yoy in February.Whereas the tolerance limit of two per cent. Indonesian Securities analyst Samuel Lana Soelistianingsih states that investors are reacting negatively. The ECB itself is predicted to continue its monetary policy by raising interest rates to 1.75 percent this year. Previously, several other central banks to raise its benchmark interest rate is China, India, Sweden, Poland. While Japan and the UK still kept its base rate respectively at zero percent and one percent. The ECB raised interest rates the first time since July 2008 as fears of inflation exceeds the collateral damage issue euro zone economy is weakening. "Even the tightening of monetary policy will affect even the slightest euro zone economy as a whole," said European Capital Economics economist Ben May. March ECB President Jean Claude Trichet signaled that rising interest rates can not be ignored because of soaring inflation that has been melibih target of two percent. He estimates there will be increasing its benchmark interest rate by 25 basis points to 1.25 percent. Interest rates in the euro zone previously pegged at a record low since May 2009 at the level of one percent. With inflation at 2.6 percent last month and is expected to continue to soar, Board of Governors of the ECB is expected to create a new policy before the bank was preceded other similar countries such as the Federal Reserve, Bank of England, or the Bank of Japan. (WDI)