The European Central Bank (ECB) on the 30th (local time) kept all three key policy rates, including the deposits rate, unchanged.
The ECB said it held a currency policy meeting that day and decided to keep the deposits rate (2.00% per year), the main rate (2.15%), and the marginal lending rate (2.40%) unchanged.
Since June 2024, the ECB has cut the deposits rate by 2.00 percentage points (p) over the course of a year. From July last year through that day, all seven meeting outcomes were holds.
The ECB said, "The Governing Council is well placed to navigate the current uncertainty," and noted, "Upside risks to prices and downside risks to economic growth have both increased."
The eurozone's flash consumer price inflation for April announced that day was 3.0%. It was 0.4 percentage points higher than last month (2.6%), when the impact of rising oil prices due to the Middle East war began to appear.
By contrast, the eurozone's first-quarter economic growth was 0.1% from the previous quarter. Concerns are growing about stagflation, in which high inflation and an economic downturn appear simultaneously.
The ECB said, "The impact of the war on medium-term inflation and economic activity depends on the strength and duration of the energy price shock, as well as the scale of indirect and second-round effects," adding, "The longer the war drags on and the longer energy prices stay elevated, the greater the impact on overall prices and the economy will be."
With the rate hold that day, the gap between the eurozone's currency policy benchmark deposits rate and Korea's base rate (2.50%) remained at 0.50 percentage point. The rate gap between the eurozone and the United States (3.50–3.75%) is 1.50–1.75 percentage points.
Markets expect the ECB to raise the policy rate at the meeting in June and to hike it two more times by year-end.