Brussels, 03/12/2015 (Agence Europe) - On Thursday 3 December, the ECB decided to reduce the interest rate on the deposit facility from -0.2% to -0.3% (with effect from 9 December) and to extend until at least March 2017 its programme for the buyback of public and private securities ('quantitative easing' or 'QE').
“These decisions are not unanimous”, but they have a “very large majority”, said the President of the ECB, Mario Draghi, after the meeting of the Governing Council. He said that the accommodative monetary policy measures taken were “effective”, but that they needed to be reinforced in order to tackle the persistent nature of the factors preventing inflation from returning to a trajectory in line with the European institution's mission, in other words close to but less than 2% in the medium term. “We are doing more because it works, to consolidate something that has been a success”, Draghi said.
Compared to September, the ECB has trimmed its inflation forecasts for the eurozone slightly, and this is now expected to stand at 0.1% in 2015, 1.0% in 2016 and 1.6% in 2017. Growth in the zone is expected to be 1.5% in 2015, 1.7% in 2016 and 1.9% in 2017.
These are not the only monetary policy measures the ECB has taken. The principal payments on the securities purchased under the APAP programme will be reinvested “for as long as necessary”, in order to ensure that the securities purchased stay on the balance sheet for a long period, Draghi said. The 'QE' programme will in future include securities issued by local authorities. Additionally, the main refinancing operations and three-month refinancing operations will continue for as long as necessary.
Transparency. The former Governor of Banca d'Italia went on to welcome the constructive work carried out with the European Ombudsman, Emily O'Reilly, on issues related to the transparency of decisions made and tackling potential conflicts of interest. The ECB has just made a decision to extend to one week preceding a monetary decision the so-called quiet period during which Executive Board members may not meet or speak to the media or market players.
Lastly, the ECB kept unchanged the interest rates on main financing operations (0.05%) and for the marginal loan facility (0.3%). (Original version in French by Mathieu Bion)