European Central Bank announces 25 basis point reduction in interest rates
(MENAFN) On Thursday, the European Central bank (ECB) announced a 25 basis point reduction in its three key interest rates, in line with market expectations. This move marks the fifth consecutive rate cut since the ECB began its monetary easing cycle in June 2024. The decision reflects the bank's ongoing efforts to support economic activity in the euro area by lowering borrowing costs.
Following the cut, the ECB's key deposit rate now stands at 2.75 percent, its lowest level since early 2023. Additionally, the interest rates on the main refinancing operations and the marginal lending facility were both reduced to 2.90 percent and 3.15 percent, respectively. These adjustments are aimed at fostering growth and addressing economic challenges in the Eurozone.
The ECB's decision comes just one day after the US Federal Reserve opted to keep its benchmark policy rate unchanged at 4.25 percent-4.5 percent. Both central banks are navigating similar economic pressures but have adopted different approaches in their recent policy moves.
In the context of economic data, the euro area's annual consumer inflation rate for December rose to 2.4 percent, a 5-month high, up from 2.2 percent in November. Core inflation, excluding volatile food and energy prices, remained unchanged at 2.7 percent for the fourth consecutive month. Meanwhile, the euro area's GDP for the fourth quarter of 2024 unexpectedly stagnated, following a 0.4 percent growth in the previous quarter, according to flash estimates.
MENAFN02022025000045015839ID1109157609
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.