ECB keeps key rates unchanged as inflation goes up
The European Central Bank kept its quantitative-easing programme unchanged as policy makers gauge whether a recent jump in inflation will endure.
The Governing Council reaffirmed its decision that monthly asset purchases will be reduced to 60 billion euros ($63 billion) from April, compared with 80 billion euros currently.
Policy makers also left the main refinancing rate at zero and the deposit rate at minus 0.4%, as predicted by a Bloomberg survey .
The ECB also said rates will stay at present or lower levels for an extended period, and well past the horizon of net asset purchases. The euro fell after the decision to trade little changed at $1.0551.
Exactly two years after the ECB started buying euro-area government bonds, inflation is above its goal and calls to reduce the stimulus are mounting. Draghi has sought to defuse the pressure by pointing out that price acceleration is largely driven by energy costs, and that political risks including national elections have the potential to knock the recovery off course. The Governing Council's decision sticks to a line set back in December, when it announced that bond purchases will be extended until at least the end of 2017. That will take the total amount of assets bought during the program to 2.28 trillion euros, equivalent to a quarter the size of the entire euro-area economy .
Draghi will unveil fresh inflation forecasts that are likely to support the decision to press on with stimulus. While the projection for this year will be raised to about 1.7% from the current 1.3%, price growth will then stay at about those levels -and below the ECB's goal -for the following two years, according to euroarea officials.
The outlook for next year will be increased to approximately 1.6% from 1.5%, and the rate for 2019 will remain unchanged at 1.7%, said the people, who asked not to be identified. . The projections aren't final until they are published, and a spokesman for the central bank declined to comment on the matter.
The Governing Council reaffirmed its decision that monthly asset purchases will be reduced to 60 billion euros ($63 billion) from April, compared with 80 billion euros currently.
Policy makers also left the main refinancing rate at zero and the deposit rate at minus 0.4%, as predicted by a Bloomberg survey .
The ECB also said rates will stay at present or lower levels for an extended period, and well past the horizon of net asset purchases. The euro fell after the decision to trade little changed at $1.0551.
Exactly two years after the ECB started buying euro-area government bonds, inflation is above its goal and calls to reduce the stimulus are mounting. Draghi has sought to defuse the pressure by pointing out that price acceleration is largely driven by energy costs, and that political risks including national elections have the potential to knock the recovery off course. The Governing Council's decision sticks to a line set back in December, when it announced that bond purchases will be extended until at least the end of 2017. That will take the total amount of assets bought during the program to 2.28 trillion euros, equivalent to a quarter the size of the entire euro-area economy .
Draghi will unveil fresh inflation forecasts that are likely to support the decision to press on with stimulus. While the projection for this year will be raised to about 1.7% from the current 1.3%, price growth will then stay at about those levels -and below the ECB's goal -for the following two years, according to euroarea officials.
The outlook for next year will be increased to approximately 1.6% from 1.5%, and the rate for 2019 will remain unchanged at 1.7%, said the people, who asked not to be identified. . The projections aren't final until they are published, and a spokesman for the central bank declined to comment on the matter.
