On Thursday, the 26th of October, fort he first time since July 2022, the European Central Bank (ECB) decided to maintain interest rates unchanged.
During the meeting in Athens the ECB council decided to maintain the main refinancing operations rate at 4.5%, the deposit facility rate at 4% and the marginal lending facility rate at 4.75%.
Interest rates had so far been increased by the council of the ECB for ten consecutive meetings.
In the report published after the meeting, the ECB council noted that the information broadly confirmed its previous assessment of the medium-term inflation outlook.
“Inflation is still expected to stay too high for too long, and domestic price pressures remain strong. At the same time, inflation dropped markedly in September, including due to strong base effects, and most measures of underlying inflation have continued to ease. The Governing Council’s past interest rate increases continue to be transmitted forcefully into financing conditions. This is increasingly dampening demand and thereby helps push down inflation,” the report mentions.
“The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. Based on its current assessment, the Governing Council considers that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal. The Governing Council’s future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary,” the council notes in the report.
“The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission,” as mentioned in the report.
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