ECB Leaves Rates Unchanged Amid Rising Concerns Over Iran War Impact
(RTTNews) - The European Central Bank left its interest rates unchanged on Thursday, as expected, even as policymakers expressed increasing concern over the impact of the surging energy prices and the intensifying war in the Middle East.
The Governing Council, led by ECB President Christine Lagarde, left the benchmark - the deposit rate steady at 2.0 percent, the main refinancing rate at 2.15 percent and the marginal lending rate at 2.40 percent. Rates were held steady for a seventh policy session in a row.
The central bank noted that the upside risks to inflation and the downside risks to growth have intensified.
"The implications of the war for medium-term inflation and economic activity will depend on the intensity and duration of the energy price shock and the scale of its indirect and second-round effects," the ECB said in a statement.
"The longer the war continues and the longer energy prices remain high, the stronger is the likely impact on broader inflation and the economy," the bank added.
The ECB affirmed that the Governing Council remains "well positioned to navigate the current uncertainty."
The central bank reiterated that it is closely monitoring the situation and will stick to a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.
The bank also repeated that it is not pre-committing to a particular interest rate path.
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