After holding interest rates, as predicted, the European Central Bank decided ease the targeted longer-term refinancing operations (TLTRO III) further, while announced new pandemic refinancing operations.
The Governing Council unveiled a new non-targeted pandemic emergency longer-term refinancing operations (PELTROs) to endorse liquidity.
“The Governing Council’s new pandemic emergency purchase programme (PEPP), which has an overall envelope of €750 billion, will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions,” the ECB statement added.
The ECB is fully prepared to increase the size of the PEPP, while stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner.
“The monthly net asset purchases under the APP will continue to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates,” according to the statement.
As for interest rates, the ECB will keep them steady 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.