ECB: Key Interest Rates Remain Unchanged

25 January 2024

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

In a statement published on its website, the ECB said, ‘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 three key ECB interest rates remain unchanged at 4.5% for main refinancing operations, 4.75% for the marginal lending facility, and at 4% for the deposit facility.

Data would continue to guide the Governing Council’s decisions, especially data regarding the inflation outlook, underlying inflation and monetary policy transmission, the statement said.

‘The incoming information has broadly confirmed its [the Governing Council's] previous assessment of the medium-term inflation outlook’, the ECB said. ‘Aside from an energy-related upward base effect on headline inflation, the declining trend in underlying inflation has continued, and the past interest rate increases keep being transmitted forcefully into financing conditions.’

The statement repeated the December resolution about PEPP, namely that reinvestments would continue in full during the first half of 2024 and then be gradually reduced to zero at the end of the year.

‘As banks are repaying the amounts borrowed under the targeted longer-term refinancing operations, the Governing Council will regularly assess how targeted lending operations and their ongoing repayment are contributing to its monetary policy stance’, the ECB said.