Emre Yumlu 
The European Central Bank (ECB) has announced its interest rate decision! What is the current situation and inflation rate, and how are ECB’s future policies shaping up?
European Central Bank (ECB) Announces Interest Rate Decision!
Despite a slight increase in inflation in the euro area in February, the European Central Bank (ECB) proceeded with a 25bps rate cut, prioritizing economic support over inflation concerns as growth remained sluggish.
The ECB’s policy-setting governing council reduced euro area interest rates by 25bps for the sixth consecutive time, bringing the total reduction since June 2024 to 150bps. The latest decision, announced on March 6, 2025, was made despite a slight rise in inflation in February, with both core and services inflation remaining above the ECB’s 2% target.
As a result, the deposit facility rate (DFR), main refinancing operations (MRO) rate, and marginal lending facility rate were set to 2.50%, 2.65%, and 2.90%, respectively, effective from March 12, 2025.
ECB Cuts Rates to Support Economic Growth
ECB President Christine Lagarde stated that the rate cut reflects the governing council’s revised inflation outlook and economic conditions. This decision signals the ECB’s commitment to balancing inflation control with economic growth.
Lagarde emphasized that the disinflation process remains on track, with headline inflation expected to average 2.3% in 2025. However, domestic inflation pressures persist, particularly due to delayed wage adjustments.
Lagarde also noted that while the rate cuts have made borrowing cheaper, credit growth remains subdued. Economic growth projections for the coming years have been revised downwards. The ECB emphasized its data-dependent approach to future rate decisions.
The next monetary policy meeting is scheduled for April 17, 2025.