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European Central Banks gradually reduce rates as inflation slows
(MENAFN) European central banks have started reducing their interest rates this year, albeit at a slow pace, as inflation decreased toward their respective targets.
Following aggressive rate hikes over the past two years to combat high inflation, the first steps toward monetary easing were taken in the second half of 2024, though not uniformly across all European central banks. Several countries' central banks remained cautious, despite core inflation returning to more manageable levels.
The European Central Bank (ECB) had raised its key interest rates at 10 consecutive meetings starting in July 2022.
By early 2024, the ECB's refinancing rate stood at a record high of 4.5 percent, while its marginal lending facility rate reached 4.75 percent.
In June, the ECB implemented its first rate cut in five years, reducing all three main policy rates by 25 basis points to encourage borrowing and stimulate the eurozone economy.
This historic move was followed by additional rate cuts, bringing the ECB’s deposit facility rate to 3 percent, the main refinancing rate to 3.15 percent, and the marginal lending facility rate to 3.4 percent by the end of the year.
Following aggressive rate hikes over the past two years to combat high inflation, the first steps toward monetary easing were taken in the second half of 2024, though not uniformly across all European central banks. Several countries' central banks remained cautious, despite core inflation returning to more manageable levels.
The European Central Bank (ECB) had raised its key interest rates at 10 consecutive meetings starting in July 2022.
By early 2024, the ECB's refinancing rate stood at a record high of 4.5 percent, while its marginal lending facility rate reached 4.75 percent.
In June, the ECB implemented its first rate cut in five years, reducing all three main policy rates by 25 basis points to encourage borrowing and stimulate the eurozone economy.
This historic move was followed by additional rate cuts, bringing the ECB’s deposit facility rate to 3 percent, the main refinancing rate to 3.15 percent, and the marginal lending facility rate to 3.4 percent by the end of the year.
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