The European Central Bank on Thursday left interest rates unchanged for a fifth policy session in a row, as expected, despite concerns over a challenging global economy that is pressured by the ongoing trade wars and geopolitical conflicts.
The Governing Council, led by ECB President Christine Lagarde, held the benchmark interest rate – the deposit rate, steady at 2 percent. The refinancing rate was retained at 2.15 percent and the marginal lending rate at 2.40 percent.
The bank expects inflation in the euro area to stabilize at its 2.00 percent target in the medium term. Policymakers noted a resilient Eurozone economy despite a challenging global environment.
“Low unemployment, solid private sector balance sheets, the gradual rollout of public spending on defence and infrastructure and the supportive effects of the past interest rate cuts are underpinning growth,” the ECB said.
“At the same time, the outlook is still uncertain, owing particularly to ongoing global trade policy uncertainty and geopolitical tensions.”
The Governing Council will “follow a data-dependent and meeting-by-meeting approach” to determine the appropriate monetary policy stance, the bank said, while adding that the rate-setting body is not pre-committing to a specific rate path.
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