The European Central Bank (ECB) kept its deposit facility rate unchanged at 2% on Thursday, marking the third consecutive meeting without a change in rates.
In a statement, the ECB said, “The Governing Council today decided to keep the three key ECB interest rates unchanged. Inflation remains close to the 2% medium-term target and the Governing Council’s assessment of the inflation outlook is broadly unchanged. The economy has continued to grow despite the challenging global environment. The robust labour market, solid private sector balance sheets and the Governing Council’s past interest rate cuts remain important sources of resilience. However, the outlook is still uncertain, owing particularly to ongoing global trade disputes and geopolitical tensions.”
The Governing Council reiterated its commitment to ensuring that inflation stabilises around the 2% target over the medium term. It reaffirmed that monetary policy decisions will continue to follow a data-dependent, meeting-by-meeting approach in determining the appropriate stance.
Specifically, future interest rate decisions will depend on the Council’s evaluation of the inflation outlook and associated risks, taking into account the latest economic and financial data, the trends in underlying inflation, and the effectiveness of monetary policy transmission.The Council emphasised that it is not pre-committing to any specific rate path.
(Inputs from WAM)
