ISTANBUL

The European Central Bank (ECB) on Thursday left its three key interest rates steady, meeting market forecasts.

The key deposit rate stands at 2%, its lowest level since November 2022.

The interest rates on the main refinancing operations and the marginal lending facility are at 2.15% and 2.40%, respectively.

The decision to keep rates unchanged marked the fourth consecutive hold. The bank last lowered rates at its June meeting, completing an eight-cut cycle that began when the ECB launched its easing phase in June 2024.

The bank said its updated assessment reconfirms that inflation should stabilize at the 2% target in the medium term.

"The new Eurosystem staff projections show headline inflation averaging 2.1% in 2025, 1.9% in 2026, 1.8% in 2027 and 2.0% in 2028," the bank said.

For inflation, excluding energy and food, the central bank projected an average of 2.4% in 2025, 2.2% in 2026, 1.9% in 2027 and 2.0% in 2028. "Inflation has been revised up for 2026, mainly because staff now expect services inflation to decline more slowly," the ECB said.

"Economic growth is expected to be stronger than in the September projections, driven especially by domestic demand," it added.

The ECB stressed that it is determined to ensure that inflation stabilizes at its 2% target in the medium term.

The decision came after the eurozone's annual inflation was at 2.1% in November, stable from 2.1% in October, slightly above the ECB's medium-term target of 2%.