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ECB raises rates to 3.25%
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February 3, 2000: 8:11 a.m. ET
Euro-zone interest rates hiked, following Federal Reserve's move
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LONDON (CNNfn) - The European Central Bank (ECB) raised its key borrowing rate for the 11-nation euro-zone by a quarter percentage point to 3.25 percent Thursday in a move that analysts believed paved the way for another hike before the end of the first quarter.
Economists had been split over whether the ECB would raise rates a day after the U.S. Federal Reserve pushed through a widely-expected quarter-percentage-point rise in its own discount rate.
The U.S. move was part of a broader move toward higher global interest rates designed to calm inflation fears, after commodity and energy prices rose sharply over the past year. Australia's central bank raised its interest rates by half a percentage point Wednesday and Sweden and Canada are also expected to hike later this week.
Britain raised its key interest rate last month and economists expect a further push in borrowing costs again later this month.
Markets were caught off guard by the decision, with the euro firming to 97.50 cents against the dollar from around 97.40 before the announcement, after briefly dipping to 97.15. Bond yields also climbed, with the yield on the 10-year German benchmark bond, or Bund, rising to 5.535 percent from 5.523 percent. 
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European Central Bank
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