European Central Bank maintains key interest rates
/ Our Today
administrator
The European Central Bank (ECB) will be keeping its three key interest rates unchanged for another month.
The decision was taken on Thursday (October 26) by the ECB’s Governing Council at its monthly meeting, where the interest rates on the bank’s refinancing operations, the marginal lending facility, and the deposit facility will all be maintained at 4.50 per cent, 4.75 per cent, and 4.00 per cent, respectively.
It was influenced by recent market information, which aligns with previous assessments of the medium-term inflation outlook. Inflation is expected to remain elevated for an extended period, driven by robust domestic price pressures. However, there was a significant drop in inflation in September, partly due to favourable base effects, and measures of underlying inflation are showing signs of moderation.
It was noted that the past interest rate increases implemented by the ECB Governing Council are effectively influencing financing conditions, which is reducing demand and contributing to lowering inflation.
In ensuring that inflation returns to its two per cent medium-term target in a timely manner, the governing council will continue to follow a data-based approach in determining the appropriate level and duration of its monetary policy restriction.
As such, its monetary policy stance will continue to be in accordance with incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. Therefore, the governing council argued that future decisions will ensure its policy rates are set at sufficiently restrictive levels for as long as necessary.
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