The ECB Governing Council concluded its June meeting this morning and here are the main monetary policy decisions from the meeting:
(1) To increase the size of the pandemic emergency purchase programme (PEPP) by €600 billion to a total of €1,350 billion. The purchases will continue to be flexible across asset classes and among jurisdictions.
(2) The horizon for net purchases under the PEPP will be extended to at least the end of June 2021. In any case, the Governing Council will conduct net asset purchases under the PEPP until it judges that the coronavirus crisis phase is over.
(3) No changes in policy interest rates. 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. Based on current projection, the inflation will only reach 1.5% in 2022 which means the current low and negative interest policy will not move upward at least until 2022.