Monetary policy

What are the key ECB interest rates?

The key ECB interest rates are interest rates that are set and used by the European Central Bank (ECB) within the operating framework set up to maintain price stability in the euro area. They are an essential instrument for conducting monetary policy, as they affect the cost of debt for economic agents (governments, firms, households), both in capital markets and on the market for bank loans, and the remuneration of different saving instruments (for example, bank deposits). The ECB's monetary policy decisions therefore affect households’ and firms’ consumption, saving and investment decisions (see How does monetary policy work?). Therefore, by adjusting interest rates, the ECB influences aggregate economic activity and, ultimately, inflation.

There are three key ECB interest rates.

The ECB sets the interest rate on main refinancing operations (MROs), which provide the banking system with liquidity on a weekly basis. This interest rate determines the amount that credit institutions pay the ECB when borrowing for one week (see What are open market operations?).

The ECB also sets the rate on the deposit facility and the rate on the marginal lending facility (see What are standing facilities?). The deposit facility rate defines the interest credit institutions receive on their overnight deposits at the central bank. The ECB kept the deposit facility rate at negative levels from 2014 to July 2022 (see What does it mean if interest rates are negative?). Meanwhile, the marginal lending facility rate is the rate credit institutions pay the ECB when they borrow money overnight.