Monetary policy

The primary objective of the Eurosystem is to maintain price stability.

To achieve this objective, the European Central Bank (ECB) manages monetary policy, through which it aims to influence the cost and availability of money in the economy.

This section includes information on how monetary policy works in the economy, which instruments and procedures are used to achieve its goals, who the counterparties are and the role played by collateral in central bank operations.

Monetary policy indicators

Main refinancing operations

4.50%

Effective: 20.09.2023

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Marginal lending facility

4.75%

Effective: 20.09.2023

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Deposit facility

4.00%

Effective: 20.09.2023

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Inflation target

2%

ECB TARGET OVER THE MEDIUM TERM

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Euro area inflation

2.8%

Latest data: January 2024

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FAQs about monetary policy

In this section we answer different questions regarding how monetary policy works and how it affects us in our daily lives. Thus, we help you understand basic concepts such as what reference interest rates are, how inflation is measured, or what a central bank is and why its role is so important in the economy.

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Contributions to monetary policy analysis

Over the years, the Banco de España has significantly contributed to the analysis of monetary policy with analytical articles, working papers and occasional papers. Moreover, in this section you will also find important public interventions on monetary policy that the Governor, the Deputy Governor and the Directorate General Economics, Statistics and Research have made in recent years.

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Euro area monetary policy and instruments

The European Central Bank (ECB) bases its decisions on its monetary policy strategy, with which it seeks to achieve its medium-term inflation target in the euro area. To achieve this, it uses a series of monetary policy instruments. The main instrument is the set of key interest rates.

The Banco de España also has an important role within the euro area, derived on the one hand from its status as a national central bank and, on the other, from its membership in the European System of Central Banks (ESCB).

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Collateral

The European Central Bank (ECB) and the national central banks buy and sell collateral in the financial markets. Here you will find information on which assets are eligible and what is the framework for assessing them.

In addition, to manage these assets, the Eurosystem will launch a unified system, the Eurosystem Collateral Management System (ECMS), in 2024.