ROMA (ITALPRESS) – The Governing Council today decided to maintain unchanged the three reference interest rates of the ECB. Its updated assessment confirms again that inflation should stabilize on the target of 2% in the medium term. The economy continues to show good holding capacity in a difficult world context. The low level of unemployment, the solidity of private sector budgets, the gradual execution of public defence and infrastructure expenditure, together with the favourable effects deriving from past reductions in interest rates, are supporting growth. At the same time, the prospects are still uncertain, especially because of the indeterminateness of commercial policies and geopolitical tensions in place worldwide.
The Governing Council is determined to ensure that inflation is based on the objective of 2% in the medium term. To define the appropriate monetary policy orientation, the Governing Council will follow a data-driven approach where decisions are taken from time to time at each meeting. In particular, the decisions of the Governing Council on interest rates will be based on the assessment of the prospects for inflation and the risks associated with them, considered the new economic and financial data, as well as the dynamics of underlying inflation and the intensity of the transmission of monetary policy, without binding on a particular path of rates.
Interest rates on deposits at the central bank, major refinancing operations and marginal refinancing operations will remain unchanged at 2%, 2.15% and 2.40% respectively. The portfolios of the PAA and the PEPP (pandemic emergency purchase programme) are reducing at a measured and predictable pace, as the Eurosystem no longer reinvests the capital repaid on the securities expiry. The Governing Council is ready to adapt all its instruments within its mandate to ensure that inflation is established on the medium-term objective of 2% and to preserve the smooth functioning of the monetary policy transmission mechanism.
Moreover, the instrument of protection of the monetary policy transmission mechanism can be used to counter unjustified, disorderly market dynamics that seriously jeopardize the transmission of monetary policy in all the countries of the euro area, thus enabling the Governing Council to fulfil its mandate of price stability more effectively.
– Photo IPA Agency –
(ITALPRESS).
