After its first decision to lower its policy interest rates in April 1999, the ECB has raised its policy rates seven consecutive times, starting in November 1999 through until the last move one week ago. These decisions were taken to counteract the emergence of risks to price stability in the euro area. The analyses conducted under both pillars of our strategy corroborated our decisions.
In this context, it is pertinent to note that the monetary policy mainly operates through interest rates and interest rate signals, and constraints posed by administered interest rates have to be duly recognized while dealing with issues relating to monetary policy transmission mechanisms.