Investing.com – The European Central Bank raised its main interest rate on Thursday for the first time in more than 11 years, beyond its own guidelines when trying to reduce inflation from the highest record.

ECB said that it would raise tariffs on deposit facilities, which provide effective floors for Euro money market tariffs, by 50 basis points to 0%, ending nine -year experiments with negative official interest rates. The level of refinancing and marginal loan rates will also increase by 50 basis points to 0.5% and 0.75%.

The bank has said at its last meeting that his party intends to raise a deposit rate of 25 basis points in July, with a greater increase in September depending on the progress of inflation. The annual inflation rate in the Euro zone rose more than what was expected to be 8.6% in June, according to data released earlier this week by Eurostat, encouraging sudden recount by the central bank.

As a result, the ECB gestures to no longer provide guidance going forward, which has been used for more than 10 years, very convincing them that there will be no immediate policy tightening.

“Today’s frontloading from the way out of the negative interest rate allows the governing council to make a transition to the meeting approach to meetings for interest rate decisions,” he said, adding that future actions will “depend on data”.

Euro rose on the news, reaching $ 1,0260, an increase of 0.8% on that day.

The central bank said that he had made its very aggressive decision after simultaneously approved the new policy instrument intended to become a kind of safety net for the government bond market. The so -called ‘transmission protection instrument’ aims to maintain volatility in the Euro zone government bond market in a reasonable level but it is not possible to stop long -term market levels that rise absolutely because it increases the official.

“TPI … can be activated to fight the dynamics of unreasonable and unreasonable markets that cause serious threats to monetary policy transmissions throughout the Euro region,” ECB said in a statement, adding that there would be no ‘ex-ante’ boundary on the intervention scale which is carried out under the program and notes that their scale “depends on the severity of the risk faced by policy transmission”.