“We have not discussed the PEPP plan, the plan will go on until March 2022 and in any case until we believe the pandemic is over”. The PEPP will continue “to ensure favorable financing conditions and the growth of inflation”. Christine Lagarde, number one of the ECB, said this in the press conference following the announcement of interest rates and the revision of forward guidance.
Today, Thursday 22 July, the European Central Bank confirmed the interest rates and endowment of the Pepp, the anti-pandemic plan, but revised its forward guidance in light of the strategy review. The central bank has in fact agreed on a symmetrical inflation target of 2% over the medium term.
“The main ECB interest rates have long been close to their lower limit and the medium-term inflation prospects are still well below the target – reads the press release – Under these conditions, the Governing Council today reviewed its forward guidance on interest rates. It did so to underline its commitment to maintaining a constantly accommodative monetary policy stance to achieve its inflation target ”.
The central bank, as expected, left interest rates on main refinancing operations, marginal lending operations and deposits with the central bank unchanged at 0.00%, 0.25% and -0 respectively. , 50%.
The Governing Council expects key interest rates to remain at current or lower levels until inflation reaches 2% well before the end of its projection horizon and sustainably for the remainder of the projection horizon, and believes that the progress made in underlying inflation is advanced enough to be consistent with inflation stabilizing at 2% over the medium term. This may also imply a transitional period where inflation is moderately above target.