People stand in front of the Euro sculpture in Frankfurt, Germany, Aug 22, 2022. [Photo/Xinhua]
FRANKFURT -- The European Central Bank (ECB) announced on Thursday that it would slash key interest rates by 25 basis points in a bid to wind down the restrictive monetary policy.
Effective from March 12, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 2.50 percent, 2.65 percent and 2.90 percent respectively, said the central bank in a statement.
The disinflation process is well on track, with headline inflation averaging 2.3 percent in 2025, 1.9 percent in 2026 and 2.0 percent in 2027, the ECB said.
The decision to keep on cutting rates came at a time when the economy in the eurozone is facing increasing uncertainties. In its latest edition of the staff projections on Thursday, the ECB lowered its forecast for economic growth in the eurozone to 0.9 percent for 2025, 1.2 percent for 2026 and 1.3 percent for 2027.
This marks a downward revision from the ECB's forecast in December last year, which had projected 1.1 percent growth in 2025 and 1.4 percent in 2026, while the 2027 outlook remains unchanged.
The ECB attributed the weaker growth outlook for 2025 and 2026 to declining exports and sluggish investment, citing high trade policy uncertainty and broader economic instability as key factors.
