Regards 04/23 - Impact of rising interest rates on banks in Luxembourg

After a decade of very accommodating monetary policy, inflationary pressures have pushed central banks to raise their key rates sharply and rapidly in order to moderate demand and contain inflation expectations. Penalised for several years by low rates, banks are benefiting from this sharp rise in rates, which is boosting their interest margins. The total interest margin should have increased by 37% in 2022 and then by 26% in 2023, giving a strong boost to the sector's added value.