The Governing Council decided today to keep the ECB’s three key interest rates unchanged. Its updated assessment once again confirms that inflation is expected to stabilize at the 2% target over the medium term. The economy remains resilient in an adverse global environment. Low unemployment, strong private-sector balance sheets, the gradual implementation of public spending on defense and infrastructure, and the supportive effects of previous interest rate cuts are helping to support growth. At the same time, the outlook remains uncertain, mainly due to ongoing uncertainty surrounding global trade policies and continuing geopolitical tensions.

The Governing Council is determined to ensure that inflation stabilizes at the 2% target over the medium term. It will follow a data-dependent approach and make decisions on a meeting-by-meeting basis to determine the appropriate monetary policy stance. In particular, its interest rate decisions will be based on its assessment of the inflation outlook and the risks surrounding it, in light of incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission. The Governing Council does not pre-commit to a particular path for interest rates.

ECB key interest rates

The interest rates on the deposit facility, the main refinancing operations, and the marginal lending facility will remain unchanged at 2.00%, 2.15%, and 2.40%, respectively.

Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP)

The APP and PEPP portfolios are declining at a measured and predictable pace, as the Eurosystem is no longer reinvesting principal payments from maturing securities.

The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilizes at the 2% target over the medium term and to safeguard the smooth functioning of monetary policy transmission. In addition, the Transmission Protection Instrument (TPI) remains available to counter unwarranted, disorderly market dynamics that pose a serious threat to monetary policy transmission across all euro area countries, thereby enabling the Governing Council to more effectively fulfill its price stability mandate.