The European Central Bank (ECB) announced its expected interest rate decision. The ECB left the refinancing rate at 4.25 percent, the deposit rate at 3.75 percent and the marginal funding rate at 4.50 percent. This decision confirmed expectations that interest rates would not be changed.
Last month, the ECB cut interest rates for the first time in five years. It decided to increase interest rates by a total of 450 basis points in the upcoming period to combat rising inflation after the pandemic. It has kept interest rates constant in the last five meetings.
Annual inflation in the Eurozone rose to a record 10.6 percent in October 2022, before finally falling to 2.5 percent last month. The ECB emphasized that it is determined to achieve its medium-term 2 percent inflation target. It was stated that interest rate decisions will be made in light of data and that there is no predetermined interest rate path.
ECB Interest Rate Decision Summary:
- Refinancing Interest: 4.25%
- Deposit Interest: 3.75%
- Marginal Funding Rate: 4.50%
“Incoming data generally support the medium-term inflation outlook. The ECB is committed to ensuring that the inflation target is achieved.”
