The European Central Bank (ECB) on Thursday decided to keep interest rates unchanged, complying with the market expectations.
Interest rates on main refinancing operations, marginal lending and deposit facility stand at 0.00%, 0.25%, and -0.50%, respectively, according to the bank’s statement.
The ECB will continue its purchases under the pandemic emergency purchase program (PEPP) with a total envelope of €1.35 trillion ($1.51 trillion).
The bank will conduct net asset purchases under the PEPP until at least the end of June 2021 and, in any case, until it judges that the coronavirus crisis phase is over, it noted.
Also, the ECB noted net purchases under the asset purchase program (APP) will continue at a monthly pace of €20 billion ($23 billion), together with the purchases under the additional €120 billion ($137 billion) temporary envelope until the end of the year.
Focus to be on inflation
According to some economists, the bank will focus on the recent inflation developments amid rising Euro.
Headline inflation turned negative in August, while underlying inflation is now also firmly below 1%, while the ECB aims an inflation rate close to 2%.
This is the reason why the experts stated it will be very interesting to see whether the inflation forecasts have been revised downwards since the relative strength of the euro is not helping the inflation target since it fuels deflationary pressures.
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