The European Central Bank on Thursday kept interest rates unchanged and reiterated that inflation is expected to stabilise at its 2 percent target over the medium term, while stepping up its public call for EU lawmakers to move faster on the Regulation establishing a digital euro. The message, delivered by ECB President Christine Lagarde in Frankfurt, underlined how the central bank increasingly frames the digital euro as part of Europe’s broader competitiveness and strategic autonomy agenda.
The Governing Council left the deposit facility rate at 2.00 percent, the main refinancing operations rate at 2.15 percent, and the marginal lending facility rate at 2.40 percent. Lagarde said the updated assessment “reconfirms” that inflation should stabilise at target, even as January headline inflation fell to 1.7 percent, largely reflecting a renewed drop in energy inflation.
Alongside the rate decision, the ECB highlighted the “urgent need” to strengthen the euro area economy through investment and structural reforms, and singled out completion of the savings and investment union, the banking union, and rapid adoption of the digital euro regulation as priorities.
Bulgaria’s euro area entry, effective 1 January 2026, also changed the Governing Council’s composition, with Bulgarian National Bank Governor Dimitar Radev joining the Council with voting rights.
Digital Euro Mention Signals Political Pressure
Lagarde’s reference to the digital euro regulation was not incidental. In the question-and-answer session, she said the ECB plans to send a “checklist” of growth and competitiveness priorities to EU leaders ahead of their 12 February meeting, naming the digital euro and “tokenised wholesale central bank money” among the items where she believes political decisions are lagging.
The framing matters for the legislative debate. While the ECB is responsible for design and issuance decisions, a digital euro cannot be launched without EU law. By repeatedly linking the project to the single market, capital markets integration and Europe’s capacity to innovate, the central bank is attempting to raise the political cost of delay.
Lagarde also used the press conference to reinforce that the ECB does not target the euro’s exchange rate, while acknowledging it influences both growth and inflation. She said the euro’s appreciation against the dollar since March 2025 is already incorporated in the ECB’s baseline outlook, although the ECB will monitor pass-through.
Beyond the digital euro, Lagarde said the ECB is reviewing its liquidity framework, distinguishing between swap lines and repo lines, and indicating that changes aimed at making euro liquidity provision more accessible to non-euro area central banks are “in the works.”
For digital euro watchers, Thursday’s meeting offered a familiar monetary policy signal, rates on hold, but a more pointed political one. The ECB is increasingly positioning the digital euro regulation as part of a wider package of EU reforms that it argues are necessary to lift productivity, reduce external dependencies, and reinforce the euro’s role in a more fragmented global economy.
Related: Digital Euro Faces Parliamentary Deadlock as Lawmakers Clash Over Design