ECB stays put, PEPP still set to end in March

The European Central Bank kept all its main policy levers at their current settings following Thursday's meeting of its governing council.

As was announced at its December meeting, asset purchases under Pandemic Emergency Purchase Programme would stop at the end of March, even as purchases under its alternate Asset Purchase Programme were bumped up in order to ensure a smooth transition.

Rate-setters also left the door open to restarting purchases under PEPP if needed.

Interest rates on the main refinancing operations and the marginal, deposit facilities were all unchanged, at 0.00%, 0.25% and -0.50%, respectively.

The ECB reiterated its intention of maintaining its key interest rates at their present levels, or lower, "until it sees inflation reaching 2% well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at 2% over the medium term.

"This may also imply a transitory period in which inflation is moderately above target."

The special conditions applying to its Targeted Longer-Term Refinancing Operations were expected to end in June 2022.