Monetary Policy Strategy

The primary objective of the Eurosystem, which consists of the European Central Bank (ECB) and the national central banks of EU Member States that have adopted the euro, is to maintain price stability. In this way, the Eurosystem contributes to overall prosperity, particularly to high economic growth and employment rates. If it does not conflict with the objective of price stability, the Eurosystem also supports the general economic policies of the European Union to help achieve the Union’s objectives: balanced economic growth, a highly competitive social market economy aimed at full employment, social progress, a high level of environmental protection, and the improvement of environmental quality. The Eurosystem also contributes to the competent authorities' smooth implementation of policies related to the prudential supervision of credit institutions and the stability of the financial system.

The Eurosystem's goal is to keep inflation in the euro area at 2% over the medium term. The ECB Governing Council’s commitment to this goal is symmetric. To maintain the symmetry of the inflation target, it is important that monetary policy responds forcefully and persistently to significant and sustained deviations of inflation from the target in either direction, to avoid deviations becoming entrenched through de-anchored inflation expectations.

The primary monetary policy instrument is the set of ECB policy rates. When the policy rates are close to the effective lower bound or to preserve the smooth functioning of monetary policy transmission, the ECB Governing Council may also use other instruments, such as longer-term refinancing operations, asset purchases, negative interest rates and forward guidance.

The ECB Governing Council makes monetary policy decisions, including the evaluation of the proportionality of its decisions and their side effects, based on an integrated assessment of all relevant factors. This assessment takes into account not only the most likely path for inflation and the economy, but also surrounding risks and uncertainty, including through the appropriate use of scenario and sensitivity analyses. The approach to organising, evaluating and cross-checking the information relevant to assessing the risks to price stability is based on a two-pillar strategy, consisting of economic analysis, and monetary and financial analysis.  Within this framework, the economic analysis focuses on real and nominal economic developments, whereas the monetary and financial analysis examines monetary and financial indicators, with a focus on the operation of the monetary transmission mechanism and the possible risks to medium-term price stability from financial imbalances and monetary factors.

Within its mandate, the Governing Council is committed to ensuring that the Eurosystem fully takes into account, in line with the EU’s goals and objectives, the implications of climate change and environmental degradation for monetary policy and central banking.

The ECB Governing Council informs the public about its decisions regularly and transparently. The Governing Council's key decisions are made during monetary policy meetings, which are held approximately every six weeks, and presented to the public by the President of the ECB at pre-announced press conferences. Public communication also takes place at the local level via the national central banks. At Banka Slovenije, we inform the public about the decisions we have adopted through our website, media communications, and social media. We also organise and participate in various public events, both in Slovenia and abroad.

The ECB’s monetary policy strategy statement, 2025

The ECB’s monetary policy strategy statement, 2021

Inflation rate in the Euro area and in Slovenia (HICP)
year-on-year growth, %