Monthly meeting in Frankfurt
Updated on Thursday, 9 September 2021 – 14:04
It assures in its statement that “favorable financing conditions can be maintained with a moderately lower rate of purchases” in the fourth quarter of the year.
Christine Lagarde, President of the ECB, at a recent event in France.
The European Central Bank (ECB) has started the course with all the markets pending this Thursday’s meeting in Frankfurt. The question was whether it would maintain its roadmap against the pandemic as it has been until now or if it would end up agreeing with those who bet on a reduction in the purchase of debt and have finally opted more for the second than for the first.
According to the statement published at the end of the meeting, “based on the joint evaluation of the financing conditions and the inflation outlook, the Governing Council estimates that favorable financing conditions can be maintained. with a moderately slower pace of net asset purchases under the PEPP than in the two previous quarters “.
The document does not specify the amount or scope of this reduction and only indicates that “the Governing Council will buy flexibly in accordance with market conditions and in order to avoid the tightening of financing conditions that is incompatible with counteracting the downward impact of the pandemic on the projected path of inflation. ”
However, the entity stresses that it will maintain the provision of the plan – 1,850 million euros – and its duration -until March 2022- “and in any case, until it deems the crisis phase of the coronavirus over.” It also ensures that it will not be exhausted if market and economic conditions do not require it and that it will reinvest the maturities under this program until the end of 2023.
No change in rates
The Governing Council has also confirmed its other measures, that is, maintains interest rates, its indications on its possible future evolution, other debt purchases, its reinvestment policies and its longer-term financing operations.
Regarding rates, the reference rate for your refinancing operations remain 0%; the rate of ease of deposit, -0.50%, and the rate of ease of borrowing, 0.25%.
The bank also reiterates that it will keep rates at their current level, or lower, until inflation reaches 2% “well before” the end of the projection horizon and “durably” for the rest of the time window.
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