The European Central Bank (ECB) has decided to lower the interest rates in 25 basic points, so that the deposit rate (DFR) remains at 2.50 %, the reference for its most important refinancing activities (MRO) in 2.65 %and that of loan convenience (MLF) in 2.90 %.
He European Central Bank (ECB) came down again on Thursday His interest rates in a percentage room Because inflation is low in the eurozone and says that monetary policy is “less restrictive”. While the analysts were discounted, the ECB continued its flexibility cycle after the descent from January, when they chose to cut in the same proportion.
After the meeting of the Board of Directors, the ECB reported that it will lower its deposit rate, for which it reimburses the surplus reserves to one day and better reflect the types in the markets, to 2.5 %.
It also falls in 25 basic points, his most important interest rate, which lends it to banks for a week, up to 2.65 %, and the convenience of credit, which it lends to banks one day, to 2.90 %.
Cutting interest rates will have an effect from 12 March 2025, has added the monetary entity.
The agency led by Christine Lagarde has indicated that monetary policy assumes “considerably limiting” orientation, since the interest rates reduce the costs of new credit for companies and houses and that the growth of loans tells.
“The process of Disinflation remains progress. In general, continuing to evolve inflation in accordance with what is expected by our experts, and the latest projections are closely in line with the earlier inflation perspectives, “the ECB said in a statement.
ECB experts now believe that general inflation will be on average at 2.3 % in 2025, 1.9 % in 2026 and 2.0 % in 2027, So it’s already in the goal That’s the 2 %.
The upward revision of general inflation by 2025 reflects a greater dynamic of energy prices.
The internal inflation remains high, the ECB adds, “mainly because of the fact that salaries and prices in some sectors are still adapted to the earlier escalation of inflation with considerable delay.”
However, wage growth is moderated as expected, and the benefits partially dampen the impact on inflation.
In turn, the ECB warns the economy Continue to be confronted Challenges And experts have returned to Reduce your growth projections Up to 0.9 % against 2025, 1.2 % against 2026 and 1.3 % against 2027.
The downward corrections for 2025 and 2026 reflect a decrease in export and the ongoing weakness of investments, due to the high uncertainty about commercial policy and uncertainty about economic policy in general.
The ECB will make its following decisions, depending on the data, so it will make the decisions during each meeting to determine the correct orientation of the monetary policy.
The decisions of the ECB on interest rates “will be based on the assessment of inflation perspectives, taking into account the new economic and financial data, the dynamics of underlying inflation and the intensity of the transfer of monetary policy, without in advance with any specific path of types,” the ECB adds.
Source: EITB
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