ECB stands pat on monetary policy

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The European Central Bank, as expected, made no changes to monetary policy on Thursday, leaving the spotlight to ECB President Christine Lagarde, whose news conference is set for 2:30 p.m. Frankfurt time, or 8:30 a.m. Eastern. The ECB left its deposit rate at minus 0.5% and its refinancing rate at 0%, while reaffirming it plans to leave rates at present or lower levels until inflation rises to converge with its target. The Governing Council also said it would continue purchases under its 1.35 trillion euro pandemic emergency purchase program, or PEPP, while also continuing to make net purchases under its asset purchase program, or APP, at a monthly pace of 20 billion euros. Those buys will be accompanied by purchases under the additional €120 billion temporary envelope until the end of the year. The Governing Council said it “continues to expect monthly net asset purchases under the APP to run for as long as necessary to reinforce the accomodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.”
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