European Central Bank sets end date for huge stimulus program

Galtero Lara
Junio 15, 2018

Bond purchases are now running at a maximum of €30 billion (R470 billion) per month, but will be lowered to €15 billion (R235 billion) per month from September, before being completely stopped at the end of December.

In a statement, the bank said: "The governing council will continue to make net purchases under the asset purchase programme at the current monthly pace of €30bn until the end of September 2018". "As expected, the central bank is signalling an end to QE later this year via a three-month taper, albeit with an optionality to change position if the data deteriorates", Claus Vistesen, the chief eurozone economist at Pantheon Macroeconomics, said in an email.

The central bank left interest rates unchanged.

It said that it expects rates to remain at their current levels "at least through the summer of 2019" adding that rates will stay put "as long as necessary to ensure that the evolution of inflation remains aligned with the current expectations of a sustained adjustment path".

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The euro lost more than a cent against the dollar after the news, with dealers contrasting the decision to leave rates unchanged in the eurozone for at least a year, with signs from the Federal Reserve that it planned two further increases in United States rates in 2018 and three more in 2019.

The ECB's president, Mario Draghi, will take questions from the discuss the bank's decision on Thursday afternoon.

The ECB shifts its policy meeting from Frankfurt, Germany, to a eurozone capital once a year, and Thursday's gathering is being held in Riga, Latvia. Somewhat unfortunately, Latvia is now unable to vote in ECB meetings, thanks to a legal dispute involving the governor of its central bank.

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