ECB reduces stimulus purchases

Source: Dukascopy Bank SA
On Thursday, March 10, the European Central Bank published its Monetary Policy Statement. In general, the bank kept its interest rates unchanged.

However, the bank announced that it would end the Pandemic emergency purchase programme and slow down the Asset purchase programme. The bank revealed also that interest rates could be changed only after the programs have been shut down.

Quoting the statement: "Based on its updated assessment and taking into account the uncertain environment, the Governing Council today revised the purchase schedule for its APP for the coming months. Monthly net purchases under the APP will amount to €40 billion in April, €30 billion in May and €20 billion in June.

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 -0.50% respectively.

In the first quarter of 2022, the Governing Council is conducting net asset purchases under the PEPP at a lower pace than in the previous quarter. It will discontinue net asset purchases under the PEPP at the end of March 2022."

Released Document

Monetary policy decisions

EUR/USD reacted to the announcement with an immediate spike up of 72 base points or 0.65%.

On a larger scale, the rate is recovering in the aftermath of plummeting and almost reaching the 1.0800 mark.

Initial Reaction

Larger scale situation

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Actual Topics

Thu, 10 Mar 2022 14:41:29 GMT

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