European Central Bank announces interest rate decision

The European Central Bank kept interest rates unchanged in line with market expectations.

The bank kept the policy rate at 0 percent, the marginal funding rate at 0.25 percent, and the deposit rate at minus 0.50 percent.

In the resolution text, it was emphasized that the pandemic asset purchase program (PEPP) will continue at a slower pace in the first quarter compared to the previous quarter. It was stated that the purchases within the program will be completed in March.

In the decision, it was stated that the asset purchase program (APP) will be 40 billion euros per month in the second quarter and 30 billion euros in the third quarter.

It was stated that net purchases under this program will be 20 billion euros, effective from October.

In the text of the decision, it was stated that the special conditions on long-term borrowings for banks will be terminated in June.

In the text of the decision, the bank added that the interest rates will not be increased until inflation settles on the 2 percent path permanently.