The
European Central Bank (ECB) left its main refinancing rate unchanged at 0.00
percent on Thursday, as widely expected. Its interest rates on the marginal
lending facility and the deposit facility were also kept unchanged at 0.25
percent and -0.50 percent, respectively.
In
its policy statement, the ECB said:
- Governing
Council confirmed its other measures, incl. its forward guidance on their
likely future evolution, its purchases under asset purchase programme (APP),
its reinvestment policies and its longer-term refinancing operations;
- Governing
Council expects key ECB interest rates to remain at their present or lower
levels until it sees inflation reaching 2 percent well ahead of end of its
projection horizon and durably for rest of the projection horizon, and it
judges that realised progress in underlying inflation is sufficiently advanced
to be consistent with inflation stabilising at 2 percent over medium term. This
may also imply a transitory period in which inflation is moderately above
target;
- Net
purchases under APP will continue at a monthly pace of EUR20 billion;
- Governing
Council will continue to conduct net asset purchases under PEPP with total
envelope of EUR1,850 billion until at least end of March 2022;
- Governing
Council continues to judge that favourable financing conditions can be
maintained with moderately lower pace of net asset purchases under PEPP than in
Q2 and Q3 of this year
- If
favourable financing conditions can be maintained with asset purchase flows
that do not exhaust envelope over net purchase horizon of PEPP, the envelope
need not be used in full. Equally, envelope can be recalibrated if required to
maintain favourable financing conditions to help counter negative pandemic
shock to path of inflation;
- Governing
Council will continue to reinvest principal payments from maturing securities
purchased under PEPP until at least end of 2023;
- Governing
Council will continue to provide ample liquidity through its refinancing
operations (TLTROs);
- Governing
Council stands ready to adjust all of its instruments, as appropriate, to
ensure that inflation stabilises at its 2 percent target over medium term