The European Central Bank (ECB) has held interest rates at a record level of 4.5% for the fifth consecutive time, announced on Thursday.
Even if most financial analysts expected this decision, a reduction could still occur within two months.
The deposit rate, an important reference point, remains at 4.0%, its highest point since the introduction of the single currency in 1999. The refinancing rate and marginal lending facility rate are set at 4.5% and 4.75%, respectively.
In March, Christine Lagarde, the president of the monetary institution, said ECB officials were “not confident enough” to loosen monetary policy. The Governing Council confirmed this on Thursday, but suggested in a statement that a rate cut could be considered in June.
"Future decisions by the Governing Council will ensure that its key interest rates remain set at sufficiently restrictive levels, for as long as necessary," the Governing Council said.
"If the assessment of inflation prospects, the underlying inflation dynamics, and the strength of monetary policy transmission were to further reinforce its confidence in a sustained convergence of inflation towards the target, it would be appropriate to reduce the current restrictive nature of the monetary policy."
The bank noted that wage growth is gradually slowing, and companies are absorbing some of the increase in labour costs through their profits. However, it warned that "internal-source price pressures are strong and keep the rise in service prices at a high level."
Inflation in the Eurozone continues to slow, reaching 2.4% in March year-on-year, down 0.2 percentage points from February, edging closer to the medium-term target of 2%.
