ECB stands pat on rates, to end QE in third quarter
By Michele Maatouk
Date: Thursday 14 Apr 2022
(Sharecast News) - The European Central Bank left its key interest rates unchanged on Thursday as it confirmed plans to end its asset purchase programme in the third quarter.
The rate on the Bank's main refinancing operations remains at zero, while its marginal lending facility stays at 0.25% and the bank deposit rate at -0.5%.
The ECB said it will buy €40bn of bonds this month. This will go down to €30bn in May and €20bn in June.
Rates will remain at record lows and won't rise until projections show inflation sustainably at 2%, the ECB said.
The Bank said: "Inflation has increased significantly and will remain high over the coming months, mainly because of the sharp rise in energy costs.
"The Governing Council will take whatever action is needed to fulfill the ECB's mandate to pursue price stability and to contribute to safeguarding financial stability."
ING economist Carsten Brzeski said: "The announcement to end net asset purchases in the third quarter was slightly firmer than at the last meeting. In fact, it would now require a severe recession or a sharp drop in headline inflation forecasts for the ECB not to stop net asset purchases over the summer.
"For the rest, there were no changes. Interest rates remain unchanged, and there was no new hint at the future path of rates. To probably tackle the recent debate on how the ECB could deal with widening bonds spreads and rumours about a new asset purchase programme, the ECB stressed that the reinvestments of the Pandemic Emergency Purchase Programme could be used to tackle market fragmentation."
Special promo:
Trading the Forex Market? Visit FXmania.com to get advanced infomation about currencies and the Foreign Exchange
Market.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN