European Central Bank Keeps All Three Key Policy Rates Unchanged, Reflects War Impact in Economic Outlook

Consumer Inflation Forecast Raised Significantly to 2.6%

"Likely to Have a Material Impact on Short-Term Inflation"

AFP Yonhap News

The European Central Bank (ECB) has kept all three of its key policy interest rates, including the deposit rate, unchanged.

On March 19 (local time), the ECB announced after its monetary policy meeting in Frankfurt, Germany, that it would maintain the deposit rate (2.00% per annum), the main refinancing rate (2.15%), and the marginal lending facility rate (2.40%) at their current levels without any changes.

In its newly released economic outlook, the ECB significantly raised its forecast for the eurozone (consisting of 21 countries using the euro) consumer price inflation rate for this year from 1.9% to 2.6%. It lowered its economic growth forecast from 1.0% to 0.9%.

The ECB stated, "The war in the Middle East has made the outlook considerably more uncertain, creating upside risks for inflation and downside risks for economic growth." The bank noted that the impact of the war was reflected in its economic outlook.

It also added, "The war is likely to raise energy prices and have a material impact on short-term inflation." The ECB explained that the medium-term impact will depend on the intensity and duration of the conflict, as well as the extent to which energy prices affect consumer inflation and the broader economy.

This content was produced with the assistance of AI translation services.