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MADRID, 26 Oct. (EUROPA PRESS) -
The Governing Council of the European Central Bank (ECB) decided this Thursday not to raise interest rates, so that the reference rate for its refinancing operations will remain at 4.50%, while the deposit rate will reach 4% and that of the loan facility 4.75%.
In this way, the issuing institute has stepped on the brakes after carrying out ten consecutive increases in the price of money that have placed it at its highest level in more than 20 years.
"The previous increases in interest rates agreed by the Governing Council continue to be strongly transmitted to financing conditions, which is increasingly slowing down demand and thereby helping to reduce inflation," the ECB says in a statement. statement, which has confirmed, even so, that the cost of living will continue to be "too high for too long" in the medium term.
The ECB has stated that interest rates "are at levels that, if maintained for a sufficiently long period, will contribute substantially" to returning inflation to the 2% target.
The 'guardian of the euro' has raised rates by 450 basis points during the current cycle of increases, which began in July last year and which has now been interrupted in a decision that analysts already took for granted.
Looking ahead, the ECB will continue to apply "a data-dependent approach" to determine the appropriate level of tightening and duration of monetary policy.
CURRENT MACRO CONTEXT
The ECB's decision comes after the euro zone's annual inflation rate was 4.3% in September, nine tenths below the price increase registered in the previous month and its lowest level in almost two years. By excluding the impact of energy and food, alcohol and tobacco from the calculation, the underlying rate relaxed to 4.5%, eight tenths less.
In addition, Eurostat has reported that GDP growth in the euro zone registered an increase of 0.2% in the second quarter of 2023, two tenths more than in the first part of the year.