ECB lowers rates again as inflation approaches 2% and growth stays sluggish

The European Central Bank (ECB) cut its key interest rate by 0.25% to 2.75% on Thursday as inflation approaches 2% and growth remains sluggish 📉. As expected, the ECB lowered rates on the deposit facility, main refinancing operations, and marginal lending facility to 2.75%, 2.90%, and 3.15%, respectively, effective from 5 February 2025.

The main refinancing rate is the cost for banks to borrow for one week, while the deposit facility rate is for overnight deposits with the ECB 🏦. The marginal lending rate is for overnight credit to banks.

The ECB emphasized its commitment to bringing inflation to its 2% target and will adjust policies based on data and economic trends 📊. They are taking a flexible approach, without committing to a fixed rate path in the future.