ECB kept the rates unchanged

The European Central Bank ECB kept its key interest rates unchanged in its meeting today on Thursday.

-The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics, the Central Bank said.

The Central Bank also announced that it will continue the current asset purchases as planned earlier.

-The Governing Council will continue its purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,350 billion. These purchases contribute to easing the overall monetary policy stance, thereby helping to offset the downward impact of the pandemic on the projected path of inflation, the ECB said.

-Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year. The Governing Council continues to expect monthly net asset purchases under the APP to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates, the bank stated.

ECB kept the rates unchanged

The European Central Bank kept its main rates unchanged in its meeting on Thursday. According to the release, the Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2%.

The Central Bank also mentioned that the Governing Council will continue its purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,350 billion. The purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions.

-The Governing Council will conduct net asset purchases under the PEPP until at least the end of June 2021 and, in any case, until it judges that the coronavirus crisis phase is over, the ECB said.

The Governing Council will reinvest the principal payments from maturing securities purchased under the PEPP until at least the end of 2022. In any case, the future roll-off of the PEPP portfolio will be managed to avoid interference with the appropriate monetary policy stance.

-Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year. The Governing Council continues to expect monthly net asset purchases under the APP to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates, it said.

-The Governing Council will also continue to provide ample liquidity through its refinancing operations. In particular, the latest operation in the third series of targeted longer-term refinancing operations (TLTRO III) has registered a very high take-up of funds, supporting bank lending to firms and households, ECB said.

Powell: Climate Change could cause systemic risk in longer-term

The US Federal Reserve Chairman Jerome Powell said today that he thinks the Climate Change could cause systemic risk in the financial system in longer-term perspective. He was speaking in the press conference after the FOMC meeting on Wednesday in Washington.

He said the systemic risk is possible and that is why it is also part of the Federal Reserve´s role to supervise the financial markets in order to keep the financial stability with other Fed agencies.

Mr Powell also underlined that it is Governments role to make the decisions to mitigate the Climate Change impact in the economy in general. The Central Bank is doing their role with the system stability and supervising the market participants, like banks and institutions.

ECB Lagarde: Climate Change is a financial risk

The President of the European Central Bank, Mrs Christine Lagarde said in the banks press conference that the Climate Change is a financial risk and that the Central Bank will also review its tools and guidelines for climate risk management in its monetary strategy review during this year.

-Climate Change is everybody’s responsibility, she said in Frankfurt on Thursday.

According to her, the Central Bank started its year long strategy review regarding the monetary policy, inflation target setting, growth measures and communications. Climate Change is a big issue, related also the ESG criterias (environmental, social and governance) and according to Mrs Lagarde, the Central Bank will have to measure the monetary policy portfolio also for this risk assessment and forecast in the future.