ECB keeps deposit rate at record level

The European Central Bank decided not to change its key rates at today's meeting. It is worth noting that since July 2022, the ECB has raised rates 10 times in a row to contain record high inflation.

Today, the base rate remains at 4.5%, the rate on margin loans is at 4.75%, and the deposit rate is at 4%. This decision coincided with market expectations: most economists believe that the rate hike cycle is now over. 

The euro remained almost indifferent to the regulator's decision, fluctuating around €1.0547 to the dollar. The stock market showed a slight improvement in sentiment, although the Euro Stoxx 50 index is still in the red.

The ECB's rate hike cycle began in July 2022. Prior to that, the deposit rate was negative (-0.5%), the base rate was 0%, and the rate on margin loans was 0.25%. The Central Bank consistently increased these rates in response to inflationary trends.

At the previous meeting in September, rates were raised by 0.25 percentage points, which brought them to the current figures. The reason for this was inflation data and economic indicators of the region.

The ECB plans to achieve inflation of 2% in the medium term. In September 2023, inflation in the eurozone was 4.3%, in August this figure reached 5.2%. Decisions on rates will be made based on the analysis of new economic data and the effectiveness of the current monetary policy.