Christine Lagarde, President of the European Central Bank (ECB), explains the ECB's decision to leave the key interest rates unchanged in March and responds to questions from the press.

The European Central Bank (ECB) announced on Thursday that it left key rates unchanged following the March policy meeting. With this decision, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will stay at 4.50%, 4.75% and 4.00%, respectively.

In the ECB Staff Projections released alongside the policy statement, the ECB noted that inflation has been revised down, in particular for 2024, which mainly reflects a lower contribution from energy prices.

ECB Staff Projections

"Staff now project inflation to average 2.3% in 2024, 2.0% in 2025 and 1.9% in 2026."

"Projections for inflation excluding energy and food have also been revised down and average 2.6% for 2024, 2.1% for 2025 and 2.0% for 2026."

"Staff have revised down their growth projection for 2024 to 0.6%, with economic activity expected to remain subdued in near term."

"Thereafter, staff expect economy to pick up and to grow at 1.5% in 2025 and 1.6% in 2026, supported initially by consumption and later also by investment."

Source : FX Street