European Central Bank Holds Key Interest Rates Steady,
Reaffirming Commitment to 2% Inflation Target
Frankfurt am Main, 30 October 2025 – The Governing Council of the European Central Bank (ECB) announced today that it has decided to keep the three key ECB interest rates unchanged. This decision comes as inflation remains close to the 2% medium-term target, and the Governing Council’s assessment of the inflation outlook is largely consistent with previous views.
The interest rate on the deposit facility will remain at 2.00%, the rate on the main refinancing operations remains at 2.15%, and the marginal lending facility rate will stay at 2.40%.
The Governing Council stated its determination to ensure that inflation stabilizes at its 2% target in the medium term. To achieve this, the Council will maintain a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. Interest rate decisions will be based on an assessment of the inflation outlook and associated risks, taking into account incoming economic and financial data, underlying inflation dynamics, and the strength of monetary policy transmission. The Council is not pre-committing to any specific future rate path.
Economic Outlook and Policy Tools
While the economy has continued to grow despite the challenging global environment, the outlook remains uncertain, primarily due to ongoing global trade disputes and geopolitical tensions. Important sources of economic resilience include the robust labour market, solid private sector balance sheets, and the Governing Council’s past interest rate cuts.
Regarding asset purchasing, the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP) portfolios are declining at a measured and predictable pace. The Eurosystem is no longer reinvesting the principal payments from maturing securities in these programmes.
The Governing Council is ready to adjust all its instruments within its mandate to achieve the 2% inflation target and maintain the smooth functioning of monetary policy transmission. Additionally, the Transmission Protection Instrument (TPI) is available to counter disorderly market dynamics that pose a serious threat to the transmission of monetary policy across all euro area countries. The President of the ECB is scheduled to comment further on the decisions at a press conference later today.
Overview of ECB Functions and Responsibilities
Beyond monetary policy, the ECB carries out several critical tasks, drawing on the expertise of its leadership, which includes the Executive Board, Governing Council, General Council, and Supervisory Board.
Key institutional tasks and responsibilities include:
Financial Stability and Payments: The ECB works on financial stability and payments and market infrastructures. This includes the development and oversight of TARGET Services (T2, T2S, TIPS). The latest Financial Stability Review was published on 21 May 2025.
The Euro and Digital Innovation: The ECB is involved in the overall management of the common currency, addressing the Eurosystem cash strategy, the issuance and circulation of banknotes, and anti-counterfeiting measures. Currently, the ECB is conducting exploratory work on the Digital euro, examining aspects like privacy, how it works, and why it is needed.
Statistics: The ECB provides access to a wide range of statistics, including Euro exchange rates, Key ECB interest rates, the Euro short-term rate (€STR), and data on inflation and euro area yield curves. A pilot project for research access to confidential statistical data was launched on 13 March 2025.
Research: In-depth studies cover diverse topics such as monetary policy strategy and implementation, fiscal policy, international macro and finance, forecasting, and legal research.
Governance and Values: The ECB operates under values of Independence, Transparency, Accountability, and Ethics. The institution also addresses climate change, maintaining a climate and nature plan, managing climate-related risks, and supporting the green transition.
The composition of the euro area continues to evolve, with Croatia joining in 2023 and Bulgaria scheduled to join in 2026.