The European Central Bank kept its three key interest rates unchanged, maintaining its current policy stance as it assesses the inflation effects of the recent energy shock linked to the conflict in the Middle East. The Governing Council said energy prices remain highly volatile but are currently close to the baseline in the June Eurosystem staff projections and still well above pre-conflict levels. It added that uncertainty remains high and that the full inflationary impact of the shock, including indirect and second-round effects, has yet to play out. The deposit facility rate remains at 2.25%, the main refinancing operations rate at 2.40% and the marginal lending facility rate at 2.65%. The Governing Council said it will continue to set policy on a data-dependent, meeting-by-meeting basis, drawing on its assessment of the inflation outlook, incoming economic and financial data, underlying inflation and the strength of monetary policy transmission, and it is not pre-committing to a particular rate path. The asset purchase programme and pandemic emergency purchase programme portfolios continue to decline as the Eurosystem no longer reinvests principal from maturing securities, while the Transmission Protection Instrument remains available to counter disorderly market dynamics that threaten monetary policy transmission across the euro area.
European Central Bank2026-07-23
European Central Bank keeps key interest rates unchanged, deposit facility at 2.25% amid energy shock uncertainty
The European Central Bank left its key interest rates unchanged, keeping the deposit facility rate at 2.25%, the main refinancing operations rate at 2.40% and the marginal lending facility rate at 2.65%. It cited continued uncertainty over the inflation impact of volatile energy prices and said future decisions will remain data-dependent and meeting by meeting. APP and PEPP holdings continue to run off without reinvestments.