Today, the European Central Bank (ECB) decided to leave its key interest rate unchanged. The deposit rate thus remains at 2.00%. The main refinancing rate is 2.15%, and the marginal lending rate is 2.40%.
Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE, comments:
"Against a relatively balanced risk environment, the ECB announced its third consecutive pause in interest rates today. While trade tensions driven by US tariffs remain a risk factor, Germany’s ambitious fiscal plans and a sluggish yet stable European economy provide a counterweight. Under these circumstances, no monetary intervention appears necessary. The deposit rate of two percent currently is neutral and does not generate inflationary pressure.
Another rate cut in December appears unlikely at this stage. However, in an increasingly less rule-based and more unpredictable global economic order, a macroeconomic shock could make such a move necessary.
Alongside the pause in monetary policy, the ECB is sending a signal about modernizing payment systems: Initiating the next phase of the digital euro, with a target launch date of 2029, underscores its strategic focus on technological innovation and European payment sovereignty for retail payments., even though political agreement is still pending."
Scientific Contact
Prof. Dr. Florian Heider
Scientific Director, Co-Director Department "Financial Intermediation"
