The President of the European Central Bank announces further changes

The President of the European Central Bank (ECB), Christine Lagarde, has indicated some changes for the next interest rate meeting in about a week and a half. Interesting modifications and changes can be expected for the July 22nd meeting, she told Bloomberg TV on the sidelines of the G20 summit. "It's going to be an important meeting." "There will be a review of forward guidance," Lagarde told Bloomberg TV in an interview broadcast Monday night. Because this must be aligned with the strategy check that has just been completed. "I have a feeling that we will continue to align ourselves with maintaining favorable financing conditions in our economies," added Lagarde. The ECB wants to support the economic recovery that is underway. "Yes, there will be some interesting variations and changes," she noted. "Forward guidance" is understood to be the monetary policy outlook of a central bank. At the ECB, it contains, among other things, statements on the likely end of the trillion dollar emergency bond purchases and information on the conditions under which key interest rates will rise again in the future. The central bank adjusted its monetary policy strategy last week. In addition to a new inflation target, it was decided to take climate aspects into greater account in monetary policy and to incorporate the costs of owner-occupied residential property into the inflation rate in the future. The ECB also wants to simplify its communication. The latter could be reflected in the declaration on the interest rate decision. According to Lagarde, the Pepp corona crisis program, with which the ECB primarily purchases government bonds from the euro countries, is to be continued as planned until "at least" March 2022. Then it could be converted into a new format, said the Frenchwoman, without explaining this in more detail. Some central bankers have already proposed that parts or aspects of the EUR 1.85 trillion program be transferred to the central bank's general securities purchases once it expires. With regard to the economic situation, Lagarde was moderately optimistic. Concerns about the rapid spread of the delta variant of the corona virus trigger her. "We have to be very flexible and not arouse the expectation that the exit will take place in the next few weeks or months," she said, referring to the ECB's monetary policy, which has not only been extremely loose since the pandemic.