ECB left interest rates unchanged as widely expected. The main refinancing rate is held at 0.00%. Marginal lending facility rate and deposit facility rate are kept at 0.25% and -0.50% respectively. ECB “expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.”
The central bank will continue the PEPP asset purchase with a total envelope of EUR 1350B, until “at least the end of June 2021” and “until it judges that the coronavirus crisis phase is over.” Principal payments from maturing securities under PEPP will be reinvested until “at least the end of 2022.” APP net purchase will continue at a monthly pace of EUR 20B, together with the additional EUR 120B temporary envelope, until the end of the year.