JAKARTA (TheInsiderStories) - The European Central Bank (ECB) left its monetary policy on hold as it faces up to a slew of global economic and political uncertainties. Presidend of ECB Mario Draghi said in a press statement, the interest rates expected to remain at present or lower levels for extended time.
He also said, APP purchases continue at €80 billion until end March and at €60 bn from April 2017 until end December 2017 or beyond if necessary. Furthermore, He said, ECB monetary policy decisions of December 2016 have secured a sustained convergence towards inflation objective.
Draghi stated the borrowing conditions for firms and households continue to benefit from the pass-through of our measures. ECB to continue to look through changes in HICP if judged to be transient and no implication for medium term. In his view, in the near term headline inflation to pick up further due to movements in annual rates of change in energy prices.
“We are confident about the smooth implementation of our asset purchase programme. Draghi: We will have to have a deep and careful analysis of situation but we are not there. Draghi: Borrowing conditions for SMEs have improved and balance sheet repair has improved markedly over last few months,” He said.
Full Statement of ECB
The Governing Council of the European Central Bank (ECB) today decided on further details of how the Eurosystem will buy assets with yields below the interest rate on the deposit facility (DFR) under the asset purchase programme (APP). At the December monetary policy meeting, the Governing Council decided to allow such purchases, to the extent necessary, and tasked Eurosystem committees with working out the implementation details.
As a result of that work, the Governing Council today decided that:
- No purchases below the DFR will be conducted under the third covered bond purchase programme (CBPP3), the asset-backed securities purchase programme (ABSPP), or the corporate sector purchase programme (CSPP)
- With regard to the public sector purchase programme (PSPP), for each jurisdiction, priority will be given to purchases of assets with yields above the DFR. This means that the amount of purchases that have to be made at yields below the DFR will vary among jurisdictions. This amount may also change over time, reflecting changes in market interest rates relative to the DFR.