The European Central Bank left its interest rates and asset purchases unchanged on Thursday, while policymakers weigh the prospect of tapering stimulus as the euro area economy revs up amid a rapid decline in the coronavirus infections and a faster vaccine roll-out.
The Governing Council, led by ECB President Christine Lagarde, left key interest rates unchanged and maintained the size of the pandemic emergency purchase programme, or PEPP, at EUR 1,850 billion.
The main refi rate was held steady at a record low zero percent and the deposit rate was kept at -0.50 percent. The lending rate was held steady at 0.25 percent.
The bank retained the forward guidance on interest rates, saying the key interest rates are expected to remain at their present or lower levels until the inflation outlook robustly converge to a level sufficiently "close to, but below, 2 percent".
PEPP asset purchases will continue until at least the end of March 2022 or when the coronavirus crisis phase is over, the bank reiterated.
"Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects net purchases under the PEPP over the coming quarter to continue to be conducted at a significantly higher pace than during the first months of the year," the bank said. "The Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry," the ECB added. Lagarde is set to hold the customary post-decision press conference at 08:30 AM ET when she is set to unveil the latest set of ECB Staff macroeconomic projections. Economists are looking for an upgrade to the GDP forecast.