European Central Bank holds deposit rate steady for 3rd consecutive time… annual 2.00％

The European Central Bank (ECB) left its policy interest rates unchanged on the 30th (local time).

The ECB held a monetary policy meeting in Florence, Italy, and decided to keep the deposit rate (2.00％), the main refinancing rate (2.15％), and the marginal lending rate (2.40％) all unchanged. The ECB said, "Inflation remains close to the medium-term target of 2％, and the Governing Council's inflation projections are broadly unchanged," adding, "The economy continues to grow despite a difficult global environment."

With the rate hold, the gap between the Eurozone (20 countries using the euro) deposit rate, which is the Eurozone's monetary policy benchmark, and South Korea's policy rate (2.50％) remained at 0.50 percentage points. The U.S. Federal Reserve (Fed) lowered its policy rate to 3.75∼4.00％ the previous day, narrowing the interest rate gap between the Eurozone and the United States to 1.75∼2.00 percentage points.

The ECB cut policy rates by a total of 2.00 percentage points over eight moves from June last year through June this year, and has kept rates unchanged at each of the three meetings since then.

Eurozone consumer price inflation fell to 1.9％ in May this year and has since remained around 2.0％. Last month it was 2.2％. The ECB forecasts inflation of 2.1％ this year and 1.7％ next year.

Experts say that with the third-quarter Eurozone economic growth rate announced that day coming in at 0.2％, above expectations, downside risks have eased and the ECB is likely to adopt a wait-and-see stance for the time being.