ECB Deposit Facility Rate Decision

Local Time:
Dec 12 2024 |
8:15 am - 8:45 am

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The European Central Bank’s Deposit Rate Decision is made by the Governing Council of the ECB every six weeks, during a meeting on monetary policy, and is announced right after the meeting.

It is one of the three key interest rates adopted by the ECB (the other two are the interest rate on the main refinancing operations and the rate on the marginal lending facility). The rate on the deposit facility is used by commercial banks to make overnight deposits with the Eurosystem. The ECB takes the decision on deposit rates depending on the inflationary outlook and economic growth.

When the purpose is to achieve intensive economic growth and to increase inflation to a target level (the current level in Eurozone is 2%), central banks often reduce interest rates, including rates on deposit facilities. The rate on the deposit facilities has been negative since 2014: banks pay for storing their money. Negative rates aim to intensify financial flows by encouraging banks to invest money in the national economy and to lend money to other banks or companies.

Cut in the rates on deposit facilities leads to a lower euro rate.

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