The European Central Bank (ECB) announced on Thursday a 25 basis points deposit facility rate cut effective from September 18, 2024, bringing it down to 3.50 per cent. This move is part of the ECB's strategy to moderate the degree of monetary policy restriction in response to the current inflation outlook and the dynamics of underlying inflation. Inflation data have aligned with expectations, with the ECB forecasting headline inflation to average 2.5 per cent in 2024 and core inflation to decrease gradually from 2.9 per cent this year to 2.0 per cent by 2026. Economic growth projections have been slightly revised down, with the economy expected to grow 0.8 per cent in 2024, up from 1.3 per cent in 2025 and 1.5 per cent in 2026. The ECB will maintain a data-dependent approach to monetary policy, adjusting rates based on economic and inflation data. The spread between the main refinancing operations rate and the deposit facility rate will be set at 15 basis points, while the spread between the marginal lending facility rate and the main refinancing rate remains unchanged at 25 basis points. Attribution: The European Central Bank (ECB) Subediting: M. S. Salama
