The European Central Bank has decided to maintain its key deposit facility rate at 2.25%, extending the pause in its monetary tightening cycle.
The decision, announced on Thursday, follows a rate hike in June and marks a shift toward a more cautious stance as the central bank evaluates the evolving economic landscape.
The move was widely anticipated by market participants, who had priced in a hold given the recent trajectory of eurozone inflation and growth data.
By keeping rates steady, the ECB signals that it is not yet ready to resume tightening, despite lingering concerns about price stability and external shocks.
This pause comes amid a complex backdrop of cooling inflation pressures and heightened geopolitical tensions, particularly regarding Iran.
The central bank is likely weighing the impact of these external factors on energy prices and supply chains, which could influence future policy decisions.