Today, the European Central Bank (ECB) decided to leave its key interest rates 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:
“The ECB’s decision to keep interest rates unchanged is appropriate in the current environment. Monetary policy is facing a high degree of uncertainty, particularly due to the situation in the Middle East. The duration of the conflict and its impact on energy prices cannot be assessed with confidence. The economy is facing a supply shock with rising stagflation risks, leaving the inflation outlook uncertain and growth subdued. This calls for caution, as the appropriate policy response is not yet clear.
The ECB’s credibility gives it the flexibility to wait for more data and respond if necessary. The challenge now is to exercise that patience while avoiding the perception of being slow to act.”
Scientific Contact
Prof. Dr. Florian Heider
Scientific Director, Co-Director Department "Financial Intermediation"
