The European Central Bank (ECB) announced on Thursday March 7 that it would maintain its key rates, for the fourth time in a row, in order to combat inflation which remains high in the euro zone. The deposit rate remains at a record high of 4%. After an unprecedented increase since 2022, the time is not yet to decline, estimated the European institution. The central banks of other major world economies are also maintaining a status quo to combat rising prices, before being able to ease their monetary policy.
In a globalized market economy, central banks function like thermostats: they ensure that the system is not overheated or, on the contrary, under-operated. The last five years constitute a textbook case: after an almost total shutdown during the Covid-19 epidemic, the global economy took off with a bang, causing two years of record inflation.
What is the role of central banks, powerful but little-known institutions? How do they affect the delicate workings of supply and demand? With what consequences for consumers, businesses, States?
Let’s take the example of the Eurozone and lift the hood of its monetary policy machine, the ECB.