ECB Holds Interest Rates Steady Amid Uncertain Outlook
(RTTNews) - The European Central Bank maintained its key interest rates unchanged for a third policy session in a row on Thursday, as expected, as policymakers assessed that the outlook was broadly unchanged, but still uncertain due to global trade conflicts and geopolitical tensions.
The Governing Council, led by ECB President Christine Lagarde, held the deposit rate steady at 2.00 percent in the latest policy session held in Florence, Italy. The refinancing rate was retained at 2.15 percent and the marginal lending rate at 2.40 percent.
The previous changed in Eurozone interest rates was a quarter-point reduction in June. The bank had trimmed interest rates by a quarter basis points each in every rate-setting session since September last year.
The ECB said policymakers will "follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance".
"The Governing Council is not pre-committing to a particular rate path," the bank reiterated.
ING economist Carsten Brzeski said recent developments have done nothing to change the view that the bar for yet another rate cut from the ECB is high.
However, there are still valid dovish arguments that could force the central bank to cut again at the December meeting, the economist noted.
If any of the downside risks such as the adverse impact of U.S. tariffs, the stronger euro exchange rate, French politics or a delay in Germany's fiscal stimulus materialize, the ECB may engage in one or two more rate cuts, Brzeski added.
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