European Central Bank keeps 3 key interest rates unchanged

26 Oct '23

2 min read

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The European Central Bank (ECB) maintains main refinancing operation rates at 4.50 per cent, with the rates on the marginal lending and deposit facility unchanged at 4.75 per cent and 4.00 per cent, respectively.
While September saw a dip in inflation, the ECB's previous interest rate hikes still influence financing conditions and demand.

The Governing Council of the European Central Bank (ECB) has decided to maintain the interest rates on its main refinancing operations at 4.50 per cent. The rates on the marginal lending facility and the deposit facility also remain unchanged at 4.75 per cent and 4.00 per cent, respectively.

The decision to hold rates steady comes as the ECB assesses the inflation outlook. While recent data has broadly confirmed its previous assessment of medium-term inflation, concerns persist. Inflation levels are still anticipated to remain elevated for an extended period, and domestic price pressures continue to exert influence, the Governing Council said in a media release.

Despite these concerns, inflation did see a notable decrease in September, partly due to strong base effects. Additionally, several indicators of underlying inflation have shown signs of easing. However, the ECB's previous interest rate hikes continue to impact financing conditions, which in turn affect demand and contribute to the inflation outlook.

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 release added.

The ECB will continue to follow a data-dependent approach when determining the appropriate level and duration of restrictions. Its decisions will be grounded in assessments of the inflation outlook, economic and financial data, the dynamics of underlying inflation, and the effectiveness of monetary policy transmission.

Fibre2Fashion News Desk (KD)

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