ECB keeps interest rates unchanged at 1st meeting of the year

Interest rates have not yet decreased, but your monthly installment can decrease... contact the credit intermediaries of Poupança no Minuto and find out how. But first, read about the current state of interest rates.

It is the third consecutive time that the ECB decides to keep rates unchanged.

For the third consecutive time, the European Central Bank (ECB) decided to maintain the key interest rates on Thursday, as analysts indicated.

According to a statement quoted by Notícias ao Minuto, "the European Central Bank (ECB) Council decided today to keep the ECB's three key interest rates unchanged. The information that has been made available has broadly confirmed the previous assessment of medium-term inflation prospects."

After raising interest rates 10 times since 2022 to the highest historical level, the ECB pauses the monetary tightening cycle.  

"Except for a base effect upward in global inflation related to energy products, the downward trend in underlying inflation continued and the previous increases in interest rates are still being transmitted vigorously to financing conditions. Restrictive financing conditions are dampening demand, which is helping to reduce inflation," reads the statement in the news.

So, the interest rates now remain: the one applicable to the main refinancing operations at 4.50%, the one applicable to the permanent liquidity-providing facility at 4.75% and the one applicable to the permanent deposit facility at 4.00%.  

"The ECB Council is determined to ensure the timely return of inflation to its medium-term target of 2%. Based on its current assessment, the ECB Council considers that the ECB's policy rates are at levels that, if maintained for a sufficiently long period, will make a substantial contribution to this end. Future decisions of the ECB Council will ensure that the policy rates will be set at sufficiently restrictive levels for as long as necessary," explains the ECB, cited in a news article on the information website. Policy rates will be fixed at sufficiently restrictive levels.

So, when can we expect a decrease in interest rates? Central bankers, members of the ECB, explained at Davos forum that the chances of it happening before summer are slim.

Therefore, and according to ECB President Christine Lagarde, the likelihood is that the rate cut will happen during the summer, while reinforcing the need for future data on price trends.

Interest rates have not decreased yet, but your monthly installment can be reduced.

While interest rates do not decrease, in case you have a home loan with a variable interest rate indexed to Euribor rates, know that you can choose measures that still lower your monthly installment.

Renegotiating your current conditions with your bank, such as your spread or other contracted products, can help reduce the installment.  

Or choose transfers: if you have your life insurance contracted with the insurance company associated with your bank, know that, by law, it is possible to transfer the contract to another insurance company. In this case, you can save significantly, even though the bank may penalize your spread.

Afterwards, you can also transfer your home loan to a different bank! You should know that there are banks promoting campaigns with mixed rates (where the rate is fixed during an initial period), starting from 2.50% fixed for one year. This will provide savings on your monthly installment.

For all of these options, one clear path is: With a credit intermediary and insurance mediator, communication with banks and insurers becomes easier! These are free services available at Poupança no Minuto, and they handle all the bureaucracy, finding the best options for you. Contact us and find out how we can help you lower your monthly installment.