This is a depressing speech from EU Central Bank chief Christine Lagarde citing recessionary vibes in Europe, prolonged inflation, and slowing demand (both European demand and international demand for European products).
Personally, I assumed Christine Lagarde was going to give a hawkish pause but the Central Bank increased the interest to 25 BPS (0.25%). Her perspective aligns with the fears of European governments that inflation is going to remain high. The ECB refinancing rate is at 4.5% and the marginal lending rate now is 4.75%. Rates were only higher in Europe in 2008 and 2001.
Clearly, there’s a lot of pessimism and fear in Frankfurt and Brussels right now which is spreading to national governments. Rates are relatively very high for today’s economic conditions.
Are the loan rates in Malta going to increase ?
Rates for existing loans in Malta have not increased because many ofthem are at a fixed rate and the central bank in Malta has pressured banks to keep rates the same. This does not apply to credit limits or overdrafts, and banks will also be less enthusiastic to offer loans.