In the Asian session on Thursday (March 23), the EUR/USD rose to 1.0874, an increase of 0.18%. In addition, Lagarde reiterated the language used when making the decision to raise interest rates by 50 basis points, that is, if the ECB‘s “base case” holds, then there is a case for monetary policy to act. There is no trade-off between price stability and financial stability.
Lagarde also said ECB officials will be watching the banking sector closely in the coming weeks and months to see if companies are becoming less willing to lend.
“Europe will achieve price stability and bring inflation back to 2 percent over the medium term,” she added, adding that the ECB would adopt a robust strategy that was dependent on economic data and was ready to act at any time. The ECB has a number of tools at its disposal to provide liquidity support to the financial system when necessary and to maintain the smooth transmission of monetary policy.
