ECB Drew Attention to the Inflation Target

ECB drew attention to the inflation target. The European Central Bank said that current interest rates will be maintained until the symmetrical inflation target of 2 percent is reached.

In its monetary policy decision, the European Central Bank did not make any changes in the interest rates and asset purchase program in order to reach the inflation targets set with the latest strategy change, but emphasized that the monetary policy framework will be maintained until the inflation targets are reached. Emphasizing that there will be no change in the monthly amount of the asset purchase program, the ECB underlined that the Governing Council will maintain the current monetary policy framework until the expansionary effect of the asset purchase program is seen. Pointing out that more assets will be purchased in the second quarter compared to the first months of the year under the Pandemic Urgent Purchase Program (PEPP), the ECB announced that a total of 1.85 trillion Euros of net asset purchases will be made with PEPP until the end of March 2022. It was also said in the statement that the Governing Council is ready to make changes in all its instruments to achieve its inflation targets. Stating that they will continue to maintain expansionary financing conditions for all sectors, in her press conference, ECB President Christine Lagarde said, " The recovery in the euro area continues, but the shadow of the pandemic is still upon us. There is an increase in inflation, but this is expected to be mostly temporary. Inflation outlook remains low in the medium term."