Current ECB decision: From September-December 15 billion bond purchases, then end

The ECB decision has just been announced.

The ECB’s key interest rate (refinancing rate) remains unchanged at 0.00%.

The extremely important bank deposit rate, to which banks refer with regard to negative interest rates, also remains unchanged at -0.40%.

The marginal lending facility also remains unchanged at 0.25%.

Important: From September until December 2018, the ECB will continue to buy bonds for 15 billion euros per month. Then the program ends!

Here is the ECB’s official statement on this decision:

First, as regards non-standard monetary policy measures, the Governing Council will continue to make net purchases under the asset purchase programme (APP) at the current monthly pace of €30 billion until the end of September 2018. The Governing Council anticipates that, after September 2018, subject to incoming data confirming the Governing Council’s medium-term inflation outlook, the monthly pace of the net asset purchases will be reduced to €15 billion until the end of December 2018 and that net purchases will then end.

Second, the Governing Council intends to maintain its policy of reinvesting the principal payments from maturing securities purchased under the APP for an extended period of time after the end of the net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

Third, the Governing Council decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with the current expectations of a sustained adjustment path.

Today’s monetary policy decisions maintain the current ample degree of monetary accommodation that will ensure the continued sustained convergence of inflation towards levels that are below, but close to, 2% over the medium term.

ECB Tower in Frankfurt. Foto: EZB

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