The European Central Bank (ECB) on the 5th (local time) held a currency policy meeting in Frankfurt, Germany, and kept all three key policy rates, including the deposits rate, unchanged.
The ECB said it would leave the deposits rate (2.00% per year), the main refinancing rate (2.15%), and the marginal lending rate (2.40%) unchanged.
With this hold, the gap between the eurozone (21 countries using the euro) currency policy benchmark deposits rate and Korea's base rate (2.50%) remained at 0.50 percentage point (p). The rate gap between the eurozone and the United States (3.50%–3.75%) also remained unchanged at 1.50–1.75 percentage points.
Starting in June 2024, the ECB cut policy rates by a total of 2.00 percentage points over eight moves in one year, and has held them steady for five consecutive meetings through today.
The ECB said, "Recently updated assessments have repeatedly confirmed that inflation will stabilize at the 2% target over the medium term," adding, "The economy is showing resilience despite a difficult global environment." It also noted that a low unemployment rate, increased public expenditure in defense and infrastructure, and the effects of past rate cuts are supporting growth, while adding that "uncertainty remains elevated due to global trade policy uncertainty and geopolitical tensions."
The ECB projects the eurozone's growth rate this year at 1.2% and consumer price inflation at 1.9%. Last year's growth rate was tentatively tallied at 1.5%. Markets also see the economy staying in a Goldilocks state (neither too hot nor too cold) for the time being.