Central Banks Hold Interest Rates Steady Worldwide

The European Central Bank has decided to keep its three main interest rates unchanged. The deposit rate remains at 2.50% while the refinancing operations and marginal lending facility stay at 2.65% and 2.90% respectively.

The decision reflects caution regarding the ongoing impact of energy prices. The council assesses that the energy shock increases risks to inflation and puts downward pressure on economic growth. Core inflation remains stable for now.

In Hong Kong, the monetary authority also held the base rate at 4.25%. The move followed the United States Federal Reserve decision to keep borrowing costs steady. Major local commercial banks followed suit and kept their rates unchanged.

The global climate of uncertainty dictates a data-dependent approach for future meetings. The European Central Bank emphasized that it is not committing to a specific interest rate path. Asset portfolios are undergoing a gradual and predictable reduction as bonds mature.

These monetary policy decisions influence global liquidity and the appetite for risk assets. Maintaining high interest rates in developed economies may strengthen the dollar against other currencies and impact Bitcoin volatility by altering the opportunity cost of capital.