Economic Buzz: ECB keeps interest rates steady, highlights elevated energy prices

European Central Bank (ECB) decided to keep the three key ECB interest rates unchanged. The outlook for energy prices, while highly volatile, currently stands close to the baseline of the June Eurosystem staff projections and well above the levels recorded prior to the conflict in the Middle East. Uncertainty remains high and the full inflationary impact of the energy shock has yet to play out. The Governing Council of ECB noted that it is therefore closely monitoring the intensity and duration of the shock, as well as its indirect and second-round effects. The Governing Council is committed to setting monetary policy to ensure that inflation stabilises at its 2% target in the medium term. The interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will remain unchanged at 2.25%, 2.40% and 2.65% respectively.

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