ECB: Purchases reduced to €15 billion until December, rates on hold until summer 2019

The European Central Bank has recently published its monetary policy statement, with key takeaways found below.

  • The Governing Council will continue to make net purchases under the asset purchase programme (APP) at the current monthly pace of €30 billion until the end of September 2018.

  • The monthly pace of the net asset purchases will be reduced to €15 billion until the end of December 2018 and that net purchases will then end.

  • The Governing Council decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively.

  • The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with the current expectations of a sustained adjustment path.

  • Today’s monetary policy decisions maintain the current ample degree of monetary accommodation that will ensure the continued sustained convergence of inflation towards levels that are below, but close to, 2% over the medium term.

Key notes

When is the ECB interest rate decision and how could it affect EUR/USD?

The ECB Governing Council is widely expected to keep the interest rates on its main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at zero, 0.25 and -0.40 percent respectively.

ECB Meeting Preview: 8 Major Banks expectations from June meet.

Most of the researchers and economists expect the ECB to announce another recalibration of QE this week, but at the same time suggest that it looks very unlikely that the ECB will announce an end date for QE any time soon.

About ECB's press conference

Following the ECB´s economic policy decision, the ECB President gives a press conference regarding monetary policy. His comments may influence the volatility of EUR and determine a short-term positive or negative trend. His hawkish view is considered as positive, or bullish for the EUR, whereas his dovish view is considered as negative, or bearish.

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