The European Central Bank (ECB) has kept its policy rates unchanged after seven consecutive rate cuts.
On July 24 (local time), the ECB held a monetary policy meeting in Frankfurt, Germany, and announced that it would keep all policy rates unchanged, including the deposit rate (2.00%), the main refinancing rate (2.15%), and the marginal lending rate (2.40%).
The ECB explained, "Domestic price pressures continue to ease, and the pace of wage growth is also slowing," adding, "Recent data largely align with our previous inflation outlook assessment." The ECB further stated, "The economy has shown overall resilience even in a challenging global environment," while also noting, "At the same time, the environment remains exceptionally uncertain, especially due to trade disputes."
After shifting its monetary policy direction to rate cuts in June last year, the ECB lowered policy rates a total of eight times, by a cumulative 2.00 percentage points. From September last year until last month, the ECB reduced rates by 0.25 percentage points at each of seven monetary policy meetings.
There is analysis that the current eurozone deposit rate has entered a neutral range (estimated at 1.75?2.25%), which neither stimulates nor slows the economy. The eurozone consumer price inflation rate also reached 2.0% last month, meeting the ECB's target.
However, some in the market expect that, depending on future economic indicators, the ECB could cut policy rates by an additional 0.25?0.50 percentage points this year.
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