FRANCOFORTE (GERMANY) (ITALPRESS) – The Governing Council of the European Central Bank has decided to maintain unchanged the three reference interest rates. In detail, interest rates on deposits at the central bank, major refinancing operations and marginal refinancing operations will remain unchanged at 2.25%, 2.40% and 2.65% respectively.
“The prospects for energy prices, though highly variable, are at the moment on levels close to the basic scenario of the projections formulated in June by Eurosystem experts and well above those recorded before the Middle East conflict – explains the BCE in a note -. Uncertainty remains high and the inflationary impact of energy shock must still be fully manifested. The Governing Council therefore closely follows the intensity and duration of the shock, as well as its indirect and second impact effects. The Governing Council undertakes to define monetary policy in order to ensure that inflation is based on the objective of 2% in the medium term.”.
With today’s decision the Governing Council “remains in a favourable position to address the uncertainty caused by the conflict – the note continues –. In order to define the appropriate monetary policy orientation, a data-driven approach will follow, according to which decisions are taken from time to time at each meeting.”
In particular, “the decisions of the Governing Council on interest rates will be based on the assessment of the prospects for inflation and the risks associated with them, considered the new economic and financial data, as well as the dynamics of underlying inflation and the intensity of the transmission of monetary policy, without binding on a particular path of rates.”.
The portfolios of the PAA and the PEPP (pandemic emergency purchase programme) are reducing at a measured and predictable rate, as the Eurosystem no longer reinvests the capital repaid on the securities expiry.
Finally, the Governing Council says it is ready to adapt all its instruments within its mandate to ensure that inflation is established on the medium-term objective of 2% and to preserve the smooth functioning of the monetary policy transmission mechanism. Moreover, the instrument of protection of the monetary policy transmission mechanism can be used to counter unjustified, disorderly market dynamics that seriously jeopardize the transmission of monetary policy in all the countries of the euro area, thus enabling the Governing Council to fulfil its mandate of price stability more effectively.”.
– Photo IPA Agency –
(ITALPRESS).
