Global EditionASIA 中文双语Français
World
Home / World / Europe

ECB announces second interest rate cut of this year

Xinhua | Updated: 2024-09-12 23:09
Share
Share - WeChat
European Union flags flutter in Frankfurt, Germany on Sept 12. [Photo/Agencies]

FRANKFURT -- The European Central Bank (ECB) on Thursday announced it would cut key interest rates again, marking its second rate reduction this year following a move in June, with no indication of the future rate path.

In a press release, the ECB announced that it has decided to reduce the deposit facility rate by 25 basis points to 3.5 percent due to declining inflation. This decision follows the bank's June rate cut, which marked its first reduction in five years.

The market expects this move would further ease financing conditions for households and businesses in the eurozone.

"Based on the Governing Council's updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to take another step in moderating the degree of monetary policy restriction," the bank said.

According to the spread established by the ECB between the three key interest rates, the rates for the main refinancing operations and the marginal lending facility will be reduced to 3.65 percent and 3.90 percent, respectively, following the cut to the deposit facility rate.

The latest staff projections released by the central bank maintain the inflation forecasts unchanged from its June estimates. The ECB staff anticipate that inflation will average 2.5 percent in 2024, 2.2 percent in 2025, and 1.9 percent in 2026.

The core inflation projections have been revised upward for both 2024 and 2025.

Projections for economic growth in the euro area have been revised downward compared to June. The ECB staff forecast that the economy will grow by 0.8 percent in 2024, 1.3 percent in 2025, and 1.5 percent in 2026.

The ECB reiterated its commitment to reducing inflation in the euro area in a timely manner, stating, "It will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim."

It marks the second time the ECB has cut key interest rates since June, when the rates were lowered by 25 basis points.

Most Viewed in 24 Hours
Top
BACK TO THE TOP
English
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US