ECB: Interest Rates Remain Unchanged

26 October 2023

By Isabel Teles – ATHENS (Econostream) – The European Central Bank’s Governing Council on Thursday decided to keep its three key interest rates unchanged, as widely expected.

In a statement published on its website, the ECB said that its previous assessment of the inflation outlook had been confirmed, adding that ‘[i]nflation is still expected to stay too high for too long, and domestic price pressures remain strong’.

‘The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.50%, 4.75% and 4.00% respectively’, the ECB stated.

The level and duration of restrictions would be determined by data, the ECB said.

‘The Governing Council’s past interest rate increases continue to be transmitted forcefully into financing conditions’, the ECB said. ‘This is increasingly dampening demand and thereby helps push down inflation.’

According to the statement, the Governing Council would continue to apply ‘flexibility in reinvesting redemptions coming due in the PEPP portfolio.’

‘As concerns the PEPP, the Governing Council intends to reinvest the principal payments from maturing securities purchased under the programme until at least the end of 2024’, the ECB said. ‘In any case, the future roll-off of the PEPP portfolio will be managed to avoid interference with the appropriate monetary policy stance.’