Amazon Quiz: The central bank of which continent recently raised its interest rates for the first time in over a decade?

Europe

North America

South America

Africa

Answer:  Europe

The European Central Bank (ECB) hiked interest rates in July 2022 by 50 basis points for the first time in the past 11 years.

“We are the central bank for the euro, and it is our mandate to keep prices stable. When prices in our economy are rising too fast – that is, when inflation is too high – increasing interest rates helps us bring inflation back down to our 2% target over the medium term,” ECB wrote on its website.

“Inflation is putting a strain on people. Many are worried that it is here to stay. We keep an eye on these so-called inflation expectations. That’s why we have raised interest rates: to send the message that we will not allow inflation to stay above 2%. That will help keep inflation expectations in check.”

The ECB increased its key interest rate by 0.5 percentage points to 0.0% and plans further hikes this year. The rate has been negative since 2014 in a bid to boost the region’s economy.

However, consumer prices saw an uptick at a record 8.6% in the 12 months to June as food, fuel and energy costs soared.

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