No surprises at the meeting European Central Bank of this Holy Thursday. In a context in which Russian aggression in Ukraine and the “related uncertainty” are “seriously damaging business and consumer confidence” and “inflationary pressures have intensified in many sectors”, the monetary authority of the euro zone has decided to keep unchanged the interest rates, at historical minimum levels -zero or negative, depending on the case- since 2016, and conclude their debt purchases in the third quarter, after “the new data available & rdquor ;, as reported in a statement. At the previous meeting, the central bank had announced that it would The end to such acquisitions throughout the third quarter if medium-term inflation forecasts were confirmed. And so it has been.
The monthly net purchases of the program launched in mid-2014 (APP) will have an amount of 40,000 million euros in April, 30,000 million euros in May and 20,000 million euros in June. While the calibration of the acquisitions from july “It will depend on the data and will reflect the evolution of the evaluation of the perspectives by the Governing Council”, according to the ECB in the statement.
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It will be from then on, when “some time has elapsed” since the end of those purchases, that the ECB considers adjust interest rates –Currently the main financing operations and the interest rates of the marginal lending facility and the deposit facility are 0.00%, 0.25% and −0.50%, respectively– and it will do so “gradually”, according to the central bank. The intention is that they remain at those levels “until you see inflation at 2% well before the end of your projection horizon and lastingly for the rest of that horizon, and you believe that the progress made in inflation core is sufficiently advanced to be compatible with a stabilization of inflation at 2% in the medium term”.
“Looking ahead, the monetary politics of the ECB will depend on the new data and the evolution of the assessment of the outlook by the Governing Council. In the current conditions of high uncertainty, the Governing Council will keep options open, gradual and flexible in the execution of monetary policy. The Governing Council will take whatever measures are necessary to fulfill the price stability mandate entrusted to the ECB and to help safeguard financial stability,” he said in a statement.