The European Central Bank (ECB) announced this Thursday that it has left interest rates unchanged, which is the third time since October 2023.
“The Council of the European Central Bank (ECB) decided this Thursday to keep the ECB’s three key interest rates unchanged,” the institution said after the meeting.
The deposit rate remains at 4%, the highest level recorded since the introduction of the single currency in 1999, while the main refinancing interest rate remains at 4.5% and the rate applicable to the margin lending facility. remains at 4.75%.
This is the third meeting in a row at which the ECB decided to maintain key interest rates after raising them tenfold from mid-2022.
The ECB emphasizes that “the published information largely confirmed the previous assessment of the medium-term inflation forecast.”
“Except for the rising base effect of global energy-related inflation, the downward trend in core inflation has continued and previous interest rate hikes continue to weigh heavily on financing conditions,” he said.
The institute, led by Christine Lagarde, notes that “restrictive financing conditions are holding down demand, which helps reduce inflation.”
The ECB confirms that it will continue to follow a data-driven approach in determining the appropriate level and duration of monetary tightening.
“In particular, the Governing Council’s decisions on interest rates will be based on its assessment of the inflation outlook in light of newly available economic and financial data, underlying inflation dynamics and the strength of monetary policy,” he said.
The Board of Governors ensures that interest rates are set at a sufficiently restrictive level for as long as necessary.
The ECB also notes that the asset purchase program (APP) portfolio is “decreasing at a measured and predictable pace.”
During the first half of 2024, the ECB intends to continue to fully reinvest principal payments on maturing securities purchased under the PEPP, and in the second half of the year it intends to reduce the PEPP portfolio by an average of $7.5 billion. euros per month.