ECB keeps rates unchanged at July meeting

Central banks across Europe and Asia are holding steady amid energy shocks and geopolitical tensions. The European Central Bank decided to keep its deposit facility at 2.25%, main refinancing at 2.40%, and marginal lending at 2.65%, signaling a data-driven approach to inflation aiming for 2% in the medium term and readiness to adjust instruments if needed. In Sri Lanka, the CBSL kept the Overnight Policy Rate at 8.75%, citing inflation near 6.8% and external pressures from Middle East tensions, with a view to inflation stabilizing around 5% later in the year. In Pakistan, market polls show 97% expect the SBP to hold at 11.5% at the July 27 MPC, though opinions are divided on end-2026 trajectory amid geopolitical risk and oil-price swings, with some expecting cuts later. Traders noted bond yields and money-market rates fluctuated as oil prices rebounded and geopolitical tensions influenced rate-cut expectations. Overall, policymakers emphasize data dependence and the need to shield inflation while supporting growth in a volatile global environment.