ECB keeps interest rates at 2.25% amid energy uncertainty

The Governing Council of the European Central Bank has decided to keep the three official interest rates unchanged, with the deposit rate at 2.25%, in a context of high volatility in energy prices.

The European Central Bank (ECB) has decided to maintain interest rates at their current levels, as announced by the Governing Council on Thursday. The deposit rate remains at 2.25%, the main refinancing operations rate at 2.40%, and the marginal lending facility rate at 2.65%.

This decision comes at a time of significant uncertainty regarding the evolution of energy prices, which remain highly volatile and at levels much higher than those prior to the conflict in the Middle East.

The ECB has indicated that the inflationary impact of this energy shock has not yet fully manifested, and therefore it continues to monitor its direct and indirect effects, as well as potential second-round effects.

The institution led by Christine Lagarde reaffirms its commitment to the goal of stabilising inflation at 2% in the medium term, and will be guided by incoming data, assessing the evolution of the economy and the transmission of monetary policy meeting by meeting.

Regarding asset purchase programmes, both the APP (Asset Purchase Programme) and the PEPP (Pandemic Emergency Purchase Programme) continue to be reduced at a measured and predictable pace, as the Eurosystem has ceased to reinvest the principal payments of maturing securities.

The ECB has reminded that it has the Transmission Protection Instrument (TPI) to counter disordered market dynamics that threaten the transmission of monetary policy in the euro area, allowing it to better fulfil its price stability mandate.

ECB President Christine Lagarde will hold a press conference at 14:45 (Central European Time) to explain in detail the reasons for this decision.

For citizens and businesses in the eurozone, maintaining the rates means that the cost of credit will not change for now, although the ECB remains non-committal to a specific future path. Financial markets will be attentive to Lagarde's words for clues about upcoming moves.