2024-04-11 13:33:08
The European Central Bank (ECB) is maintaining interest rates at the record level of 4.5% for the fifth consecutive time, it said on Thursday. This decision was expected by financial analysts. However, a drop might occur in two months.
The benchmark deposit rate remains at 4.0%, its highest level since the launch of the single currency in 1999, while the refinancing rate and the marginal lending rate stand at 4.0% respectively. .50% and 4.75%.
Christine Lagarde, the president of the monetary institution, explained in March that ECB officials were “not sufficiently confident” to loosen the monetary grip. The Governing Council confirmed this on Thursday, but nevertheless suggested in a press release that a rate cut might be considered in June.
“Future decisions by the Governing Council will ensure that its policy rates remain set at sufficiently restrictive levels for as long as necessary,” the Governing Council said. “If the assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further strengthen its confidence in the sustainable convergence of inflation towards the target, it would be appropriate to reduce the current restrictive nature of monetary policy.”
“The rise in wages is gradually flattening and companies are absorbing part of the increase in labor costs through their profits,” already notes the institution. “But internal price pressures are strong and are keeping the rise in prices of services at a high level,” she warns.
Price increases continued to slow down in the euro zone, to 2.4% in March year-on-year, or 0.2 points less than in February. It is getting closer to the 2% medium-term objective.
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