MNI BRIEF: ECB Cuts Rates By 25BP, Remains Data Dependent
ECB cuts as expected, offers no clear guidance on rates going forward.
The European Central Bank cut its key interest rates by 25 basis points on Thursday, lowering the benchmark deposit rate to 3.75%.
"Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady," the Governing Council said in a statement.
Projections, mainly prepared by national central banks, saw inflation modestly higher than foreseen in March for both 2024 and 2025, at 2.5% and 2.2% respectively.
The ECB said it would continue to take decisions on a meeting-by-meeting, data-dependant basis, keeping policy sufficiently restrictive to achieve its price target. (See MNI SOURCES: ECB To Hold In July, Signal Likely September Cut)
Vice President Luis de Guindos will discuss the projections and the thinking behind the latest decision at an MNI Connect livestream event on June 12. Register for the event here