The Deposit Rate (interest rate on deposits) is the rate through which the European Central Bank (ECB) guides its monetary policy direction.
According to the ECB, most measures of underlying inflation indicate that inflation will persistently land at the ECB Governing Council’s medium-term 2 percent target.
“Wage growth remains high but continues to ease significantly, and profits partly dampen the effects on inflation. Concerns that increased uncertainty and a volatile market response to trade tensions in April would have a tightening effect on financing conditions have eased,” the ECB stated.
The ECB Council is determined to ensure that inflation stabilizes durably at the medium-term 2 percent target.
“A data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance will be followed, especially under current conditions of exceptional uncertainty,” the ECB added.
At 14:45, the ECB will hold its regular press conference following today’s interest rate decision.
ECB, %
May 2025
Consensus
April 2025
Deposit Rate
2.00
2.00
2.25
Refinancing Rate
2.15
2.15
2.40
Lending Rate
2.40
2.40
2.65
(Consensus data from Bloomberg)
In recent months, the ECB has been closely monitoring economic developments and adjusting its monetary policy to support growth and maintain price stability. Despite the ongoing challenges posed by global economic uncertainties, the ECB remains committed to achieving its inflation target and ensuring the stability of the euro area economy.
The ECB’s decision to keep interest rates unchanged reflects its cautious approach to monetary policy, as it seeks to balance the need for stimulus with concerns about potential risks to financial stability. By maintaining a steady course, the ECB aims to provide certainty and support to businesses and households in the euro area, fostering sustainable economic growth and employment.
Looking ahead, the ECB will continue to assess incoming data and adjust its policy measures as needed to support the recovery and achieve its mandate of price stability. With inflation expectations well-anchored and financial conditions supportive, the ECB is well-positioned to navigate the challenges ahead and steer the euro area economy towards a path of sustainable growth and prosperity.