ECB leaves its main refinancing rate at 0.00%, says it will increase its PEPP by EUR600 billion

The European Central Bank (ECB) remained its main refinancing rate unchanged at 0.00 percent on Thursday, as widely expected.

Its interest rates on the marginal lending facility and the deposit facility were also left unchanged at 0.25 percent and -0.50 percent, respectively.

In its policy statement, the ECB said:

• The envelope for the pandemic emergency purchase programme (PEPP) will be increased by EUR600 billion to a total of EUR1,350 billion;
• The purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions;
• The horizon for net purchases under the PEPP will be extended to at least the end of June 2021;
• The maturing principal payments from securities purchased under the PEPP will be reinvested until at least the end of 2022;
• Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year;
• Reinvestments of the principal payments from maturing securities purchased under the APP will continue, in full, for an extended period of time past the date when the Governing Council starts raising the key ECB interest rates;
• The Governing Council 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;
• The Governing Council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry.