Decisions, statements & accounts

We use a set of monetary policy tools to steer inflation towards our 2% target. These tools influence both the amount and cost of loans that people and companies can get. We use these tools to influence financing conditions and the level of economic activity in the euro area which in turn affect inflation. Our primary monetary policy instrument is the set of ECB policy rates. The Governing Council of the ECB sets three rates. Deposit facility: The rate on the deposit facility, which banks may use to make overnight deposits with the Eurosystem at a pre-set interest rate. The Governing Council decided in March 2024 that it will continue to steer the monetary policy stance through the deposit facility rate. Short-term money market interest rates are expected to evolve in the vicinity of the deposit facility rate with tolerance for some volatility as long as it does not blur the signal about the intended monetary policy stance. Before the global financial crisis, we mainly conducted monetary policy by setting key interest rates. Since the financial crisis, the ECB has expanded its set of policy instruments. This has allowed us to influence financing conditions faced by people and companies in difficult times when the malfunctioning of the financial system damaged the transmission mechanism of monetary policy. During these periods, short-term interest rates approached their “effective lower bound”, i.e. the level below which lowering them would no longer increase the level of economic activity. To ensure price stability amid these challenges, we have adapted our toolbox to incorporate new tools, including: These additional instruments have served us well and will remain part of our toolbox. They give our monetary policy more space to act against the risk of low inflation or deflation. The aim of the ECB’s strategy review was to make sure our monetary policy strategy is fit for purpose, both today and in the future. To help keep prices stable, we need to have the right tools available. That is why we have introduced new monetary policy instruments in recent years. We use functional cookies to store user preferences; analytics cookies to improve website performance; third-party cookies set by third-party services integrated into the website. You have the choice to accept or reject them. For more information or to review your preference on the cookies and server logs we use, we invite you to: Read our privacy statement Learn more about how we use cookies We are always working to improve this website for our users. To do this, we use the anonymous data provided by cookies. See what has changed in our privacy policy We are always working to improve this website for our users. To do this, we use the anonymous data provided by cookies. Learn more about how we use cookies