The use of the Eurosystem’s monetary policy instruments and its monetary policy implementation framework in 2024 and 2025

Tomás Carrera de Souza, Koen Oosterhek and Soizic Weber

No 398, Occasional Paper Series from European Central Bank

Abstract: The Eurosystem implements its monetary policy through a set of monetary policy instruments (MPIs). This report reviews the main changes in the use of MPIs and the associated developments in the Eurosystem’s monetary policy implementation framework over 2024-25. Inflation returned to the ECB’s medium-term target of 2%, supported by the smooth transmission of monetary policy. After completing the hiking cycle of 2022 and 2023, the ECB began reducing its key interest rates in June 2024. This easing phase occurred alongside further balance sheet normalisation. Holdings in the monetary policy bond portfolios continued to run-off, and funds lent under the third series of targeted longer-term refinancing operations (TLTRO III) were fully repaid by December 2024. In March 2024, the ECB announced several changes to its operational framework for implementing monetary policy following a review process. Finally, the collateral framework remained broad, while temporary crisis-related measures were phased out and climate-related considerations were further integrated. JEL Classification: D02, E43, E58, E65, G01

Keywords: asset purchase programmes; central bank collateral framework; central bank counterparty framework; central bank liquidity management; climate; monetary policy implementation; non-standard monetary policy measures; refinancing operations (search for similar items in EconPapers)
Date: 2026-08
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbops:2026398

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