STORY: European Central Bank leaves interest rates unchanged
DATELINE: Oct. 28, 2023
LENGTH: 00:02:30
LOCATION: Athens
CATEGORY: ECONOMY

SHOTLIST:
1. various of European Central Bank members
2. various of Athens open market
3. SOUNDBITE 1 (English): CHRISTINE LAGARDE, ECB President
4. various of Athens open market
5. SOUNDBITE 2 (English): CHRISTINE LAGARDE, ECB President

STORYLINE:

The European Central Bank (ECB) Governing Council decided to keep the three key ECB interest rates unchanged after 10 hikes in 15 months, it was announced on Thursday at the end of a two-day meeting on monetary policy in Athens.

The interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.5 percent, 4.75 percent, and 4 percent respectively, according to an ECB press release.

The incoming information has broadly confirmed the previous assessment of the medium-term inflation outlook, it was explained.

According to the ECB Governing Council which is comprised of the governors of the national central banks of the eurozone and the six members of the ECB's executive committee, inflation is expected to stay too high for too long, and domestic price pressures remain strong.

At the same time, inflation dropped markedly in September, including due to strong base effects, and most measures of underlying inflation have continued to ease. Furthermore, the Governing Council's past interest rate increases continue to be transmitted forcefully into financing conditions and this is increasingly dampening demand and thereby helps push down inflation.

SOUNDBITE 1 (English): CHRISTINE LAGARDE, ECB President
"We are determined to ensure that inflation returns to our 2 percent medium-term target in a timely manner. Based on our current assessment, we consider that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal. Our future decisions will ensure that our policy rates will be set at sufficiently restrictive levels for as long as necessary. We will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction."

The euro-area economy remains weak and is likely to remain weak for the remainder of this year, but as inflation falls further, household real incomes recover and the demand for euro-area exports picks up, the economy should strengthen over the coming years, Lagarde said.

SOUNDBITE 2 (English): CHRISTINE LAGARDE, ECB President
"Upside risks to inflation could come from higher energy and food costs. The heightened geopolitical tensions could drive up energy prices in the near term, while making the medium-term outlook more uncertain."

The EUB President was repeatedly asked about the risks posed by the new war in the Middle East and responded that the conflict between Israel and Hamas, along with the war in Ukraine, are "key sources of geopolitical risk" under consideration. The EUB is monitoring the situation for any direct or indirect impact on energy prices, she said. 

Xinhua News Agency correspondents reporting from Athens.
(XHTV)