ECB Holds Steady on Interest Rates Amidst Political and Economic Challenges
The European Central Bank (ECB) decided to keep interest rates unchanged, citing controlled inflation and modest economic growth despite global trade tensions. As the focus shifts to France's fiscal crisis, ECB President Christine Lagarde emphasized the bank's 'meeting by meeting' approach without committing to future rate changes.
- Country:
- Germany
The European Central Bank (ECB) kept interest rates stable on Thursday as inflation remains under control and the economy shows resilience against President Trump's tariff policies. The decision came during a meeting at the bank's headquarters in Frankfurt, where the deposit rate stayed at 2 percent.
Attention has now turned to France's fiscal woes, with the ECB pondering its role in mitigating potential market instability due to France's widening deficit and political standstill. ECB President Christine Lagarde highlighted that monetary policy is on track, and underscored an unscheduled approach to future decisions.
Despite the U.S. Federal Reserve's openness to interest rate cuts, the ECB remains cautious. Meanwhile, the eurozone economy saw slight growth, absorbing the impact of higher U.S. tariffs. The ECB's deposit rate, a tool for regulating borrowing costs, was crucial in inflation control. Market analysts suggest possible future rate adjustments as France's fiscal struggles continue to pose challenges.
(With inputs from agencies.)
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