“From a monetary policy standpoint, we are in a good place. Is it a fixed place? No, but we will do whatever it takes to ensure we remain in a good place,” stated the President of the ECB following the meeting that kept the key interest rates unchanged.
In Florence, Italy, Lagarde noted that the 0.2% growth in the third quarter exceeded expectations.
“At this moment, I wouldn’t complain too much about the growth,” she added, noting that the economic bloc “can do better.”
Lagarde pointed out some risks that have been eased in recent weeks, such as the trade agreement between the United States and the European Union, progress in Washington-Beijing relations, and the recent ceasefire in the Middle East.
The President of the ECB remarked that exposure to risk is lower, reducing the slowdown or contraction risks for the economy.
However, she acknowledged potential impacts of supply chain issues, such as those involving semiconductors for the automotive industry.
The war between Russia and Ukraine “continues to be a source of great uncertainty.”
Regarding inflation, Lagarde believes that “the picture is more balanced.”
On the governors’ decision, she mentioned there was “absolute unanimity” in maintaining the key interest rates for the third consecutive time.
The ECB announced today it will keep the key interest rates, including the deposit rate at 2.00%, considered neutral for the eurozone as it neither stimulates nor hinders economic growth.
In a note released on its website, the ECB stated that interest rates on the permanent deposit facility, main refinancing operations, and the marginal lending facility will remain at 2.00%, 2.15%, and 2.40%, respectively.
The next ECB Governing Council meeting dedicated to monetary policy is scheduled for December 17 and 18 in Frankfurt, Germany.
