The European Central Bank (ECB) Governing Council left monetary policy unchanged on Thursday, in line with expectations Analysts. The central bank did not change interest rates, which remained at their lowest historical levels, or the size of the emergency asset purchase program, after announcing in the last meeting that it would accelerate the pace of purchases in the second quarter compared to the first months of that. Year. Year.
The statement released on Thursday after the meeting states: “In today’s meeting, the Board of Directors decided to reaffirm the consensual position of its monetary policy.”
Frankfurt indicates that it “will continue to make net acquisitions of assets under the PEPP (Pandemic Emergency Purchase Program – PEPP), with a total allocation of at least € 1.850 billion until the end of March 2022 and in any event, until It is considered that the period of the Corona virus crisis has ended. “
Given that the information provided in the meantime confirmed the joint evaluation of financing conditions and inflation expectations held at the March meeting on monetary policy, the Board of Directors expects that the monetary policy acquisitions during the current quarter will continue at a significantly higher rate than in the months First of the year, “Finca.
The European Central Bank states that it will continue the acquisitions “in a flexible manner according to market conditions and to avoid further tightening of financing conditions that are inconsistent with countering the downward impact of the epidemic on the expected inflation path.” , Emphasizing that “if favorable financing conditions can be maintained with asset purchase flows that do not deplete the allocation in the horizon of net acquisitions under the environmental protection scheme, the allocation will not have to be used in full”.
“Likewise, appropriations can be reset, if necessary, to maintain favorable financing conditions, in order to help counter the negative shock caused by the epidemic in the path of inflation,” he says.
Last week, Christine Lagarde indicated that the central bank would maintain support until it recovered well. “Think of a patient who has emerged from a deep crisis, but is still using crutches,” the European Central Bank president said last week. “You don’t want any crutches removed, be it budget or money related, so that the patient can walk really well.”
At the last meeting, the European Central Bank decided to maintain acquisitions under the asset purchase program due to an emergency pandemic, by allocating a total of 1,850 billion euros, at least, until the end of March 2022, and in any case, until it is considered that the period of the virus crisis has ended. Corona. However, it announced that acquisitions in the second quarter of this year should “take place at a much higher pace than in the first months of this year.”
At its Thursday meeting, the European Central Bank maintained its commitment to continue reinvesting capital payments on securities due in the context of PEPP, at least until the end of 2023, in addition to the fact that net acquisitions under the Asset Purchase Program (APP) are at a monthly rate The amount is 20 billion euros.
The central bank also kept unchanged the interest rate applied to major refinancing operations and the interest rates applied to the marginal lending facility and deposit facility at 0.00%, 0.25% and -0.50%, respectively. The Governing Council expects that key ECB interest rates will remain at or below current levels until it notes that the potential for inflation is converging strongly towards a level close enough, but less than 2% on its forecast horizon and that this convergence has been consistently reflected in the underlying inflation dynamics. , He says.
It concludes, “The Board of Directors stands ready to adjust all its instruments, as appropriate, to ensure that inflation moves in a sustainable manner towards its target, in line with its commitment to symmetry.”
Attention is now focused on the ECB president’s press conference scheduled for 1:30 pm, as analysts focus on the signals Christine Lagarde will give about the asset purchase program.
(Updated 12:52 pm)