site.btaECB Holds Key Rates Steady; Bulgaria Attends Its First Policy Meeting Since Joining Eurozone

The Governing Council of the European Central Bank Thursday decided to keep the three key ECB interest rates unchanged as predicted by analysts. The two-day monetary policy meeting marked Bulgaria's first participation as a full euro area member, with National Bank Governor Dimitar Radev representing the country.

This is the fifth consecutive meeting since June 2025 at which interest rates on the deposit facility, the main refinancing operations and the marginal lending facility have remained unchanged at 2.00%, 2.15% and 2.40%, respectively.

The ECB lowered the three key interest rates by a total of two percentage points by June 2025 from the historic high of 4% reached in 2023 amid rising inflation.

In December, the focus was on inflation dynamics, particularly on the persistence of inflation in services and domestic pressures. Following the February 4-5 meeting, the tone is more balanced, with less emphasis on inflation and greater attention on the economy's resilience amid rising external uncertainty.

"The outlook is still uncertain, owing particularly to ongoing global trade policy uncertainty and geopolitical tensions," the ECB said.

Based on a flash estimate, Eurostat said on Wednesday that euro area annual inflation is expected to be 1.7% in January 2026, its lowest level since September 2024, mainly due to lower energy prices. Core inflation, which excludes categories with highly volatile prices such as energy and food, also edged down slightly to 2.2%.