Finally, after a long wait, the second largest central bank in the world (the European Central Bank) will raise interest rates and begin to tighten monetary policy when it meets today, Thursday, July 21 for the first time since 2011. It is expected that interest rates will rise by 25 basis points to reach 0.25 % .

European inflation figures are at record levels of 8.6%, according to the latest figures issued in June, which are far from the bank’s target of 2%, and it is expected to rise more with the continuation of the reasons, as the Russian-Ukrainian war still exists, in addition to supply chain problems and the gas and oil crisis, and therefore the most important question that will be on the Today’s European Central meeting table is what after raising interest rates by 25 basis points.

The majority of central banks preceded the European Central in tightening monetary policy, the latest of which was the Bank of Canada, which raised it by 100 basis points last week. Therefore, the markets are awaiting hints of a stronger intervention in the September meeting, exceeding 50 basis points.

The euro area is gaining an additional pressure factor more than other major economies, as it is directly affected by the Russian-Ukrainian war. Fears of slowing growth and recession represent the central bank’s biggest concerns and pressure it and make it unlikely that it will exceed expectations and raise interest rates by 50 basis points or more, as Federal did. big .

Since the beginning of the week, bets have been raised that the bank may take a step of raising interest rates by 50 basis points to reach 50 50 basis points with the increase by 25 basis points, but as we mentioned that recession fears may force the bank to commit to the 25 points in today’s meeting with the hint that it may take this step in September .

The bank is also expected to announce a new bond purchase program or the so-called anti-retail tool to maintain the price differential between bonds.

The united euro currency, after falling below parity levels with the dollar last week for the first time in twenty years and losing more than 15 cents since the beginning of the Ukrainian war, has returned to rise since the beginning of the week, taking advantage of the declines of the US dollar and pricing raising interest rates today, to trade at 1.0215 levels this Thursday morning.