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ECB holds key rates steady as it monitors energy shock
The ECB kept the deposit facility, main refinancing operations, and marginal lending facility unchanged at 2.25%, 2.40%, and 2.65%, while saying it is not pre-committing to a future rate path.
The ECB Governing Council decided to keep its three key interest rates unchanged, saying it is closely monitoring the intensity and duration of the energy price shock and its indirect and second-round effects.
In its statement, the ECB said the energy outlook remains highly volatile, is currently near the June Eurosystem staff projections, and is still well above levels recorded before the conflict in the Middle East.
The central bank reiterated its commitment to setting policy to ensure inflation stabilises at its 2% target in the medium term, adding that its decisions will follow a data-dependent, meeting-by-meeting approach based on the inflation outlook, incoming economic and financial data, underlying inflation dynamics, and how strongly monetary policy is transmitted.
The ECB said the APP and PEPP portfolios are shrinking at a measured and predictable pace because the Eurosystem no longer reinvests principal payments from maturing securities, and it noted the Transmission Protection Instrument remains available to address disorderly market dynamics that threaten monetary policy transmission across euro area countries. The ECB President is scheduled to comment at a press conference starting 14:45 CET.