Monetary policy decisions

Key interest rates

The Governing Council of the ECB sets the key interest rates.

The key interest rates for the euro area set by the Governing Council are:

  • The interest rate on the main refinancing operations (MROs), which normally provide the bulk of liquidity to the banking system. The Eurosystem may execute its tenders in the form of fixed rate or variable rate tenders.
  • The rate on the deposit facility, which banks may use to make overnight deposits with the Eurosystem.
  • The rate on the marginal lending facility, which offers overnight credit to banks from the Eurosystem.

Non-standard measures

Since the intensification of the financial crisis in September 2008, the ECB has introduced a number of non-standard monetary policy measures that are unprecedented in nature, scope and magnitude with the aim to safeguard the primary objective of price stability and ensure an appropriate monetary policy transmission mechanism (for Enhanced Credit Support see Monthly Bulletin, June 2009, p.9-10 and for the Securities Markets Programme see Monthly Bulletin, May 2010, Editorial - Box 1: Additional measures decided by the Governing Council and September 2011 Monthly Bulletin, Box 5, for December 2011 measures see Monthly Bulletin, January 2012 Box 4, Monthly Bulletin, February 2012, Box 2, and Monthly Bulletin, March 2012, Box 3, for Outright Monetary Transactions see the press release of 6 September 2012, Monthly Bulletin, October 2012 and the Introductory Statement by the ECB in the proceedings before the Federal Constitutional Court, Box 1, for the modalities of the early repayment of funds raised through the three-year longer-term refinancing operations see Monthly Bulletin, February 2013, Box 3 and Monthly Bulletin, July 2013, Box 4).

Forward guidance

Following its meeting on 4 July 2013 the Governing Council of the ECB communicated that it expects the key ECB interest rates to remain at present or lower levels for an extended period of time. The Governing Council’s expectation is based on the overall subdued outlook for inflation extending into the medium term, given the broad-based weakness in the real economy and subdued monetary dynamics. At the current juncture, forward guidance contributes to the ECB’s pursuit of its mandate of maintaining price stability effectively, within the framework and in full respect of its strategy (see Monthly Bulletin, July 2013, Box 1).