Account of the ECB monetary policy meeting in June showed there was “broad agreement” that “update of the monetary policy stance was called for”, due to “prolongation of uncertainties” and the implications for inflation outlook. And inflation was still projected to reach “only 1.6%” in 2021, which was seen to remain “some distance away” from the 2% target. Thus, it’s considered “important” to “demonstration” ECB’s “determination to act”.
Also, there was “broad agreement” on adjusting the calendar based component of the forward guidance to keeping rates at present levels “at least through the first half of 2020”; reiterating the guidance on reinvestment; and thirdly, to set interest rate of TTRO II equal to average MRO rate plus 10bps.
