The European Central Bank (ECB) in accordance with the market expectations reduced 3 key rates on 25 basic points.
The ECB announced the decisions of the monetary policy adopted at the third meeting of the board of directors this year.
The statement says that the bank reduced the interest rate on deposits from 2.50 percent to 2.25 percent. The statement notes that the ECB also reduced the refinancing rate and the marginal borrowing rate by 25 basic points each up to 2.40 percent and 2.65 percent,
The decision to reduce interest rates was made taking into account the forecasts and dynamics of inflation, as well as the transmission ability of monetary policy. Emphasizing that the process of disinflation is successful, it was reported that the eurozone economy is somewhat resistant to global shocks.
“The growth prospects worsened due to the strengthening of trade tension,” the statement said.
indicating that uncertainty will reduce the confidence of households and firms, it is noted that the negative and volatile market reaction to trade tension will have a tight effect on financing conditions.
ECB is committed to the medium-term target level of inflation of 2 percent: “In conditions of extreme uncertainty, the ECB will adhere to the approach based on data and meetings to determine the corresponding position of monetary policy.”
annual inflation in the eurozone in March amounted to 2.2 percent. The ECB reduced interest rates at all three meetings held this year.