ECB Announces Another 25 Basis Points Cut in Key Interest Rates

The European Central Bank (ECB) Governing Council has made a significant decision to lower its three key interest rates by another 25 basis points (bps) for the third consecutive meeting and the fourth time this year.

The interest rates on the deposit facility, the main refinancing operations, and the marginal lending facility were cut to 3.00%, 3.15%, and 3.40%, respectively, effective December 18, 2024. This move underscores the ECB's commitment to bringing inflation back to its target of 2%.

In its statement, the ECB explained that the decision "is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission," noting that disinflation is "well on track." The institution reiterated its dedication to monitoring incoming data before defining the future of its monetary policy.