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At the meeting of the ECB Council in Frankfurt it was decided to leave the main refinancing rate at 4.5%, the overnight interest rate at 4% and the overnight interest rate at 4.75%.
In order to combat inflation, the ECB Governing Council had previously increased interest rates in ten consecutive meetings.
In a statement released after the meeting, the Council expressed confidence that current ECB interest rates will help inflation return to the 2% target level over a sufficiently long period of time.
The Council notes that “the information received essentially confirmed its previous assessment of the medium-term inflation outlook”.
“Ignoring the impact of upward base effects related to energy prices on headline inflation, core inflation remains on a downward trend and the strong pass-through of previous interest rate hikes to financial conditions continues. Tight financing conditions weaken demand, which helps reduce inflation. ” states the council.
The statement said: “The Council is committed to ensuring a timely return of inflation to its medium-term target level of 2%.”
“Based on the current assessment, the board assumes that the ECB’s key interest rates are at a level that, if maintained long enough, will make a significant contribution to achieving this goal,” emphasizes the board.
“The Council’s future decisions will ensure that monetary policy interest rates are set at a sufficiently restrictive level for as long as necessary,” the statement said.
“The Council’s approach to determining the extent and duration of restrictions will continue to be data-based. More specifically, the Council’s decisions on interest rates will depend on the assessment of the inflation outlook, taking into account the economic and financial data received, the dynamics of core inflation and the power of monetary policy transmission,” the Council adds.
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