ECB Holds Deposit Rate at 2.25%, Signals Further Hikes Through 2027

The European Central Bank (ECB) has decided to maintain its deposit rate at 2.25%, while indicating plans for additional monetary tightening. According to FX Street, the ECB’s forward guidance suggests a series of further rate increases to combat persistent inflationary pressures.

Nordea strategists, including Jan von Gerich, Tuuli Koivu, and Anders Svendsen, forecast three more 25 basis point hikes at a quarterly pace. This would bring the deposit rate up to 3% by March 2027, reflecting the ECB’s commitment to a gradual but sustained tightening cycle, FX Street reported.

For Japanese investors, the ECB’s policy trajectory is an important indicator, as it influences eurozone interest rates and FX volatility, factors that can affect carry trades and equity valuations in global markets.