European Central Bank may keep interest rates unchanged, says governing council member Dolenc

The European Central Bank might hit the brakes on its rate-hiking cycle before it really gets going. Governing Council member Primoz Dolenc, who also serves as governor of Slovenia’s central bank, indicated on June 30 that the ECB could hold rates steady at its next meeting, citing energy prices that have come in softer than anticipated.

What Dolenc actually said

Dolenc characterized the decline in oil prices as “more benign than expected,” suggesting that the inflationary pressure that prompted the ECB’s June rate hike may already be fading. His comments point to a scenario where policymakers defer their next move until September, when updated economic forecasts become available.

He described the ECB’s June 11 decision to raise key interest rates by 25 basis points as “just enough for now.” That hike, the first since 2023, pushed the deposit facility rate to 2.25%, the main refinancing rate to 2.40%, and the marginal lending rate to 2.65%.

The June increase was triggered by a surge in energy prices tied to geopolitical tensions in the Middle East. But with those pressures now easing, Dolenc suggested the central bank has room to pause and assess rather than march forward with additional tightening.

Dolenc didn’t exactly promise a hold. He acknowledged that scenarios exist where no immediate tightening is required, but he explicitly noted this isn’t his baseline expectation given ongoing geopolitical instability.

The broader ECB picture

The ECB’s June rate hike marked a sharp pivot. After spending much of 2024 and 2025 cutting rates to support a sluggish eurozone economy, the central bank reversed course when energy-driven inflation reared its head again. June 2026 inflation projections showed headline inflation averaging 3.0%, well above the ECB’s 2% target.

Dolenc’s comments carry weight precisely because they came less than three weeks after the rate hike. When a Governing Council member starts hedging this quickly, it signals genuine internal debate about the path forward.

What this means for crypto and risk assets

The relationship between monetary policy and digital asset prices has become increasingly correlated since 2022, when aggressive rate hikes by both the Federal Reserve and the ECB coincided with a brutal crypto winter. The logic is straightforward: higher rates make safe, yield-bearing assets more attractive relative to speculative ones. When rates hold steady or decline, that dynamic reverses.

The eurozone still has 3.0% inflation projections, geopolitical risk in the Middle East hasn’t vanished, and Dolenc himself said a pause isn’t his most likely scenario.

The key variable to watch is energy prices. If oil continues to decline, the ECB’s case for further hikes weakens substantially, and the September projections could reflect that. If Middle East tensions escalate and crude spikes again, Dolenc’s cautious optimism will look premature.

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