Brussels, 5 June 2023 (dpa/MIA) - The president of the European Central Bank (ECB), Christine Lagarde, says the bank is considering further interest rate hikes to combat inflation.

"Inflationary pressures remain high," Lagarde told the European Parliament's Committee on Economic and Monetary Affairs in Brussels on Monday.

The Frankfurt-based bank would "ensure that the policy rates will be brought to levels sufficiently restrictive," the ECB chief said, reiterating the institution's medium-term goal of an inflation rate of 2%.

The eurozone's annual inflation rate last fell to 6.1% in May.

Following years of zero or negative interest rates, the ECB has raised its interest rate for a record seven times in a row since July last year in the face of surging inflation rates in the eurozone.

The key interest rate at which commercial banks can obtain fresh central bank money currently stands at 3.75%. If banks park money with the ECB, they receive 3.25% interest. Most recently, the ECB raised the key interest rate by 0.25 percentage points. A similar hike is expected to be announced at the next ECB meeting on June 15.

The ECB's interest rate hikes were having a clear effect on financing conditions for businesses and households, as reflected in rising lending rates and falling credit volumes, Lagarde said. She added that the full impact of the monetary policy measures was now starting to show.

However, there was no clear indication yet that the core inflation rate has peaked, according to the ECB president.

Core inflation excludes energy and food prices, which are prone to fluctuation.

Photo: MIA Archive