Frankfurt:The European Central Bank (ECB) decided to keep its three key interest rates unchanged on Thursday, highlighting the risks that rising energy prices pose to inflation and economic growth.

According to Anadolu Agency – English, the ECB has maintained the deposit facility rate at 2.5%, the main refinancing operations rate at 2.65%, and the marginal lending facility rate at 2.9%. The bank emphasized that while the full effects of the energy shock are still unfolding, underlying inflation has remained stable, and wages have not shown a significant response.

The ECB's Governing Council noted that the magnitude and duration of the energy shock are likely to increase inflation and decrease growth. Additionally, the council observed that financing conditions have tightened since the last policy meeting, which could affect price pressures and economic expansion.

The bank reiterated its aim to stabilize inflation at its 2% medium-term target and confirmed that it is not committing to a specific path for interest rates. Policymakers will continue to adopt a data-dependent approach, evaluating economic and financial data as it comes in. Furthermore, the ECB confirmed that its asset purchase program and pandemic emergency purchase program portfolios are declining at a predictable pace, with no reinvestment of principal payments from maturing securities.