The European Central Bank (ECB) on the 19th (local time) left all three key policy rates, including the deposits rate, unchanged.
The ECB said it held a monetary policy meeting in Frankfurt, Germany, on the day and decided to keep the deposits rate (2.00% per year), the main policy rate (2.15%), and the marginal lending rate (2.40%) at their current levels.
In its new economic outlook released on the day, the ECB sharply raised its forecast for the eurozone (21 countries using the euro) consumer price inflation rate for this year to 2.6% from 1.9%. It lowered the economic growth forecast to 0.9% from 1.0%.
The ECB said, "Uncertainty in the economic outlook has increased significantly due to the war in the Middle East, creating upside risks to inflation and downside risks to growth." It also emphasized that the impact of this war was reflected in the latest outlook.
The ECB added, "As energy prices rise due to the war, there will be a tangible impact on prices in the short term," and, "The medium-term impact depends on the intensity and duration of the conflict, and the extent to which energy prices spill over into consumer prices and the broader economy."
With this decision, the gap between the eurozone's benchmark currency policy rate, the deposits rate, and Korea's base rate (2.50%) remains 0.50 percentage points. The rate differential between the eurozone and the United States (3.50%–3.75%) stands at 1.50–1.75 percentage points.
After cutting the deposits rate by a total of 2.00 percentage points over about a year since June 2024, the ECB has kept rates on hold at all six meetings from last July through the day.