The European Central Bank reduced its three key policy rates by 25 basis points in line with market expectations. This marked the second consecutive interest rate cut in the bank’s recent meetings. The ECB emphasized that the disinflation process was on track.

The European Central Bank (ECB) reduced the deposit rate by 25 basis points to 3.25 percent.

Following the interest rate cut in September, the ECB also lowered the rates in October. Economists had expected the rates to be lowered to this level.

The bank reduced the deposit rate from 3.50 percent to 3.25 percent. The refinancing rate was set at 3.40 percent, and the marginal lending rate was lowered to 3.65 percent. This marked the third cut since March 2016 for both the refinancing rate and marginal funding rate, and the third cut for the deposit rate since September 2019. The ECB’s decision today came after the Eurozone experienced slowing economic growth and inflation falling below the bank’s 2 percent target in September. The decision text pointed towards the disinflation process progressing in the Eurozone.

ECB noted that wages were still high and emphasized its commitment to the 2 percent inflation target.