ECB reduction: Key interest, what does that mean for your money?

ECB reduction: Key interest, what does that mean for your money?

On March 6, 2025, the Council of the European Central Bank (ECB) made an important monetary policy decision: the key interest rates were reduced by 25 basis points each. This lowering comes into force on March 12, 2025 and will reduce interest rates for main refinancing transactions and top -refinancing factility to 2.65 % or 2.90 %. This also means that the base rate is adapted to 2.03 % and the reference interest rate to 3.15 %, as reported in the press release of APA-OTS.

In addition, the ECB reacted to the changed inflation prospects. Compared to the last session in September 2023, inflation has dropped by more than 2.5 percentage points, which caused the ECB to reduce monetary policy tightening. The key interest rates had previously remained at the same level for nine months. The interest rate for the deposit subjectity is now 3.75 %, while the main refinancing transactions and the top -refinancing facility are 4.25 % and 4.5 %, as the Bundesbank explained in its report. These adjustments are part of a wider strategy to stabilize the economy.

reduction of the Pepp program

Another important point is the announcement of the ECB to reduce the securities stocks from its Pandemie emergency program (Pepp) in the second half of the year by 7.5 billion euros. This measure is carried out in accordance with the familiar modalities of the program for the purchase of assets (app). These steps clearly show that the ECB is ready to react appropriately to developments in inflation and economic recovery and thus positively influence the market conditions. For further details on the interest rates and their development, the information from the Report of the Bundesbank