ECB leaves its main refinancing rate at 0.00%, pledges to continue purchases under PEPP with total envelope of EUR1,850 billion

The European Central Bank (ECB) left 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:

• Governing Council expects key ECB interest rates to remain at their present or lower levels until it has seen inflation outlook robustly converge to level sufficiently close to, but below, 2%;
• Governing Council will continue purchases under pandemic emergency purchase programme (PEPP) with total envelope of EUR1,850 billion;
• Net asset purchases under PEPP will be conducted until at least end of March 2022 and, in any case, until Governing Council judges that the coronavirus crisis phase is over;
• Envelope of PEPP can be recalibrated if required to maintain favourable financing conditions to help counter negative pandemic shock to path of inflation;
• Governing Council will continue to reinvest principal payments from maturing securities purchased under PEPP until at least end of 2023;
• Net purchases under asset purchase programme (APP) will continue at monthly pace of EUR20 billion;
• Monthly net asset purchases under APP are expected to run for as long as necessary to reinforce accommodative impact of ECB policy rates, and to end shortly before ECB starts raising key interest rates;
• Governing Council will continue to provide ample liquidity through its refinancing operations;
• Governing Council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in sustained manner, in line with its commitment to symmetry