ECB keeps interest rates unchanged today. The main refinancing rate, marginal lending facility rate and deposit facility rate are held at 0.00%, 0.25%, and -0.50% respectively.
It maintains the forward guidance that interest rates will “remain at their present or lower levels” until ECB sees inflation “reaching 2% well ahead of the end of tis projection horizon and durably for the rest of the projection horizon”. Also, ECB will need to judges that realized progress in underlying inflation is “sufficiently advanced to be consistent with inflation stabilizing at 2% over the medium term.”.
ECB also reiterated that it will discontinue net PEPP purchases at the end of march 2022, and reinvests until at least the end of 2024. APP net monthly purchases will amount to EUR 40B in Q2, then EUR 30B in Q3, and back to monthly pace of EUR 20B from October onwards, (for as long as necessary”.
