BCE decides to keep interest rates unchanged

After the previous month's decrease, ECB keeps interest rates at the same levels.

The European Central Bank (ECB) has decided to keep the interest rates unchanged, after announcing a decrease for the first time in five years last month.

The data is from the ECB and, as can be read on News ao Minuto, reflects the following values: “the rate of the main refinancing operations remains at 4.25%, the rate of permanent liquidity lending facility remains at 4.50% and the rate of permanent deposit facility remains at 3.75%”.

According to the information that has been made available by the previous assessment of the ECB's outlook on medium-term inflation, "although some measures of underlying inflation have increased slightly in May, due to specific factors, the majority of measures remained stable or decreased slightly in June," as quoted by the ECB.

This is because the yoy inflation rate dropped in June to 2.5% in the eurozone, after having risen to 2.6% in May.  

In line with expectations, the inflationary impact of high wage growth was mitigated by profits. Monetary policy is keeping financial conditions tight. At the same time, internal price pressures continue to be high and inflation in service prices is elevated, with global inflation likely to remain above target for much of next year," it can still be read.

Therefore, the goal will be to maintain interest rates at sufficiently restrictive levels for as long as necessary in order to ensure the timely return of inflation to its medium-term target of 2%. Therefore, the ECB Council clarifies that it "will continue to follow a data-dependent approach" and meeting by meeting, "not committing "previously to a specific trajectory" of rates, the news quotes.

It is worth remembering that, in June at the previous meeting, the ECB cut interest rates by 25 basis points, marking the first decrease in five years, after a cycle of increases fighting against high inflation.

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