European Central Bank Holds Key Interest Rate Steady... Plans to Halt COVID-19 Response Bond Purchases in March Next Year

ECB headquarters located in Frankfurt, Germany
[Photo by Yonhap News]

The European Central Bank (ECB) on the 16th (local time) kept the key interest rate at 0%.

It also decided to stop bond purchases aimed at mitigating the economic impact of the COVID-19 pandemic by March next year.

The ECB held a monetary policy meeting in Frankfurt, Germany, on the same day and announced that it would maintain the key interest rate at the current 0%.

The deposit rate and marginal lending rate were also kept at -0.50% and 0.25%, respectively.

The ECB judged that since there has been progress in economic recovery and achieving the medium-term inflation target, it is acceptable to gradually reduce the pace of asset purchases in the coming quarters.

However, it explained that monetary policy support is necessary to ensure that inflation stabilizes at the 2% target in the medium term.

The ECB stated that it will slow down the pace of bond purchases under the Pandemic Emergency Purchase Programme (PEPP) in the first quarter of next year compared to previous quarters, and will stop bond purchases under the program in March next year.

This content was produced with the assistance of AI translation services.