European Central Bank Decreased Key Central Bank Interest Rate by 0.25% from 4% to 3.75% Effective 12th June 2024, Main Refinancing Rate Reduced to 4.25%, Marginal Lending Facility Reduced to 4.5% & Deposit Facility Reduced to 3.75%
7th June 2024 | Hong Kong
The European Central Bank (ECB) has decreased the key central bank interest rate by 0.25% from 4% to 3.75% (effective 12th June 2024), with the main refinancing rate reduced to 4.25%, marginal lending facility reduced to 4.5% & deposit facility reduced to 3.75%. ECB (6/6/24): “The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady. Since the Governing Council meeting in September 2023, inflation has fallen by more than 2.5 percentage points and the inflation outlook has improved markedly. Underlying inflation has also eased, reinforcing the signs that price pressures have weakened, and inflation expectations have declined at all horizons. Monetary policy has kept financing conditions restrictive. By dampening demand and keeping inflation expectations well anchored, this has made a major contribution to bringing inflation back down. At the same time, despite the progress over recent quarters, domestic price pressures remain strong as wage growth is elevated, and inflation is likely to stay above target well into next year. The latest Eurosystem staff projections for both headline and core inflation have been revised up for 2024 and 2025 compared with the March projections. Staff now see headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026. For inflation excluding energy and food, staff project an average of 2.8% in 2024, 2.2% in 2025 and 2.0% in 2026. Economic growth is expected to pick up to 0.9% in 2024, 1.4% in 2025 and 1.6% in 2026. The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. It will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim. The Governing Council will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction. In particular, its interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. The Governing Council is not pre-committing to a particular rate path. The Governing Council today also confirmed that it will reduce the Eurosystem’s holdings of securities under the pandemic emergency purchase programme (PEPP) by €7.5 billion per month on average over the second half of the year. The modalities for reducing the PEPP holdings will be broadly in line with those followed under the asset purchase programme (APP).” Key ECB interest rates: “The Governing Council decided to lower the three key ECB interest rates by 25 basis points. Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 4.25%, 4.50% and 3.75% respectively, with effect from 12 June 2024.” ECB on Inflation: “The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation returns to its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission. Moreover, the Transmission Protection Instrument is available to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across all euro area countries, thus allowing the Governing Council to more effectively deliver on its price stability mandate.”
“ European Central Bank Decreased Key Central Bank Interest Rate by 0.25% from 4% to 3.75% Effective 12th June 2024, Main Refinancing Rate Reduced to 4.25%, Marginal Lending Facility Reduced to 4.5% & Deposit Facility Reduced to 3.75% “
European Central Bank Decreased Key Central Bank Interest Rate by 0.25% from 4% to 3.75% Effective 12th June 2024, Main Refinancing Rate Reduced to 4.25%, Marginal Lending Facility Reduced to 4.5% & Deposit Facility Reduced to 3.75%
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