After Ten Hikes, ECB Leaves Rates Unchanged

Interest rates in the eurozone remain unchanged. The European Central Bank made this decision after ten continuous increases. Thus, the rates for main refinancing operations, margin refinancing operations, and deposits with the ECB remained unchanged – at 4.50%, 4.75%, and 4.00%, respectively.

The main goal of the eurozone currency regulator in recent months has been to curb inflation. “Inflation is expected to remain too high for too long,” the ECB said in a commentary. “At the same time, inflation fell sharply in September, partly due to the high base effect. At the same time, most core inflation indicators continued to decline. Past interest rate hikes adopted by the Governing Council continue to impact financing conditions, further slowing demand and therefore contributing to lower inflation rates.”

The goal is to return inflation to 2% as quickly as possible, and “the Governing Council considers that the ECB’s base interest rates are at levels that, if maintained for a sufficiently long period, will make a significant contribution to achieving this goal.”

ECB President Christine Lagarde spoke about the economic outlook at a press conference following the rate announcement. She explained that “the eurozone economy remains weak. The latest data suggests that production continues to contract, demand is weakening, and the credit crisis is putting pressure on consumer spending. The economy will remain weak until the end of the year.” Despite this situation, she added, at the moment there is no point in talking about reducing the rate.