ECB Cuts Deposit Rate to 3.5%, Main Refinancing Rate to 3.65%, and Marginal Lending Rate to 3.90%

Sep 12, 2024, 12:17 PM

The European Central Bank (ECB) has reduced its deposit facility rate by 25 basis points to 3.5%, marking its second rate cut this year. This decision aligns with market expectations and reflects the ECB's ongoing efforts to address cooling inflation and subdued economic activity. The ECB's main refinancing rate was also cut to 3.65%, and the marginal lending rate was reduced to 3.90%. The ECB's latest staff projections confirm the previous inflation outlook, with headline inflation expected to average 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026. Additionally, the ECB has lowered its growth forecasts for every year through 2026. Despite the rate cut, the ECB remains committed to maintaining restrictive policy rates as long as necessary to achieve its 2% inflation target.