ECB Cuts Rates for the Seventh Consecutive Time Amid Trade Pressures and Falling Inflation

In a move reflecting the continuation of its monetary easing policy,
the European Central Bank has cut interest rates for the seventh time amid trade pressures and a decline in inflation rates.

Topic
Monetary Easing

Monetary Easing

The European Central Bank (ECB) announced on Thursday, following a meeting of its monetary policy committee,
a 25 basis point cut in interest rates—an action in line with market expectations—marking the seventh consecutive easing move.

With this decision, the main refinancing operations rate now stands at 2.40%, down from 2.65%,
while the deposit facility rate was reduced to 2.25%.

In the monetary policy statement released after the decision,
the ECB indicated that the process of reducing inflation is moving in the right direction,
noting that both headline and core inflation declined in March, including a notable drop in services sector inflation.

The statement also pointed out that most indicators support the return of inflation to the bank’s medium-term target of 2%,
with wage growth remaining moderate and corporate profits helping to absorb the impact of rising wages on inflation.

The ECB affirmed that the eurozone economy continues to show a degree of resilience in the face of global shocks.
However, it warned that escalating trade tensions are starting to negatively affect growth prospects
and confidence among households and businesses,
adding that a negative market reaction could tighten financial conditions.

The ECB’s Governing Council emphasized its commitment to a data-dependent approach,
stating that it will assess inflation expectations based on evolving economic and financial conditions,
core inflation dynamics, and the effectiveness of monetary policy transmission.

The bank also reiterated that it is not pre-committed to a specific interest rate path,
stressing its readiness to use all available tools to ensure inflation stabilizes at the 2% medium-term target
and to safeguard smooth policy transmission amid rising global uncertainty.

ECB Cuts Rates for the Seventh Consecutive Time Amid Trade Pressures and Falling Inflation

ECB Cuts Rates for the Seventh Consecutive Time

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