2015

22 January 2015

The Governing Council of the European Central Bank (ECB) announces an expanded asset purchase programme (APP), under which bonds issued by euro area central governments, agencies located in the euro area and supranational European institutions will be purchased. This is in addition to the covered bonds and asset-backed securities purchased under the two existing purchase programmes. A combined monthly purchase volume of €60 billion is envisaged. The purchases are due to commence in March 2015 and are intended to be carried out until September 2016, and in any case until the ECB Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates close to, but below, 2% over the medium term. In addition, the ECB Governing Council decides to exclude risk sharing amongst Eurosystem central banks for 80% of purchases.

Furthermore, it decides to remove the previous 10 basis point spread and settle each of the remaining targeted longer-term refinancing operations (TLTROs) at the prevailing main refinancing rate.

4 February 2015

The ECB Governing Council decides to lift the waiver of minimum credit rating requirements for marketable instruments issued or guaranteed by Greece, with effect from 11 February 2015.

19 March 2015

The third out of the eight targeted longer-term refinancing operations (TLTROs) adopted in June 2014 is conducted: 143 banks borrow €97.8 billion.

18 June 2015

The fourth out of the eight targeted longer-term refinancing operations (TLTROs) is conducted: 128 banks borrow €73.8 billion.

3 September 2015

Following the review after the first six months of purchases, which was announced when the programme was launched, the ECB Governing Council decides to increase the issue share limit for purchases of individual public sector assets from the initial limit of 25% to 33%. However, for each individual issue, it must be verified that a situation in which the Eurosystem has a blocking minority is avoided. Where this is not possible, the purchasing limit remains at 25%.

23 September 2015

The ECB Governing Council increases the proportion of purchases made by national central banks under the ABS purchase programme (ABSPP), resulting in fewer purchases being made by external service providers. The Banque de France and the Nationale Bank van België/Banque Nationale de Belgique will carry out these purchases as the Eurosystem’s asset managers, while the Banque de France will undertake purchases in additional jurisdictions. Furthermore, the Governing Council decides to extend the contracts with two external asset managers. The Eurosystem continues to perform purchase price and due diligence checks before every transaction.

24 September 2015

The fifth out of the eight targeted longer-term refinancing operations (TLTROs) is conducted: 88 banks borrow €15.5 billion.

3 December 2015

As of 9 December 2015, the ECB Governing Council lowers the deposit rate by 10 basis points to -0.30%. The interest rates on the main refinancing operations and the marginal lending facility remain the same at 0.05% and 0.30% respectively.

The Council also extends the asset purchase programme (APP) by six months. The monthly purchases of €60 billion under the APP are now intended to run until March 2017, or beyond, if necessary, and in any case until the ECB Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates close to, but below, 2% over the medium term.

It also decides to reinvest principal payments of maturing securities as part of the APP and, in future, to also include purchases of euro-denominated marketable debt instruments issued by regional and local governments in the euro area.

The ECB Governing Council furthermore announces that the main refinancing operations and the three-month longer-term refinancing operations will continue to be conducted as fixed rate tenders with full allotment for as long as necessary, and at least until the end of the last maintenance period of 2017.

11 December 2015

The sixth out of the eight targeted longer-term refinancing operations (TLTROs) is conducted: 55 banks borrow €18.3 billion.

2016

10 March 2016

The Governing Council of the European Central Bank (ECB) adopts another package of monetary policy measures. It cuts the rate on the deposit facility by 10 basis points to -0.40%. The main refinancing rate and the marginal lending facility rate are lowered by 5 basis points each to 0% and 0.25% respectively.

Another component of the adopted package of measures is the expansion of the volume of the monthly purchases under the expanded asset purchase programme (APP) by €20 billion to €80 billion as of April 2016. These purchases are intended to run until the end of March 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term.

In addition, the APP is expanded to include a corporate sector purchase programme (CSPP), under which investment-grade euro-denominated bonds will be purchased from non-banks domiciled in the euro area. These CSPP purchases are scheduled to begin in June 2016.

Furthermore, the ECB Governing Council adopts a new series of four targeted longer-term refinancing operations (TLTRO II) in total. These operations will be carried out on a quarterly basis and are scheduled to begin in June 2016. Participating banks will be able to borrow a total amount of up to 30% of their outstanding loans to the non-financial private sector (excluding loans to households for house purchase) as at 31 January 2016, less any amount that is still outstanding under the first two operations in the first series of TLTROs (TLTRO I). Each operation will have a maturity of four years. The interest rate will be fixed for the entire term of each operation at the rate applicable to the main refinancing operations (MROs) at the time of allotment.

30 March 2016

The seventh of a total of eight TLTRO I operations is settled. This operation sees 19 institutions take up an overall volume of €7.3 billion.

22 June 2016

The Governing Council of the ECB decides to reinstate the waiver permitting marketable debt instruments issued or fully guaranteed by the Greek government to be used as collateral in Eurosystem monetary policy operations. The waiver is granted on the basis of Greece’s participation in an aid programme of the EU and the IMF.

29 June 2016

The eighth and final operation in the TLTRO I series, launched in June 2014, is settled. This operation sees 25 institutions take up an overall volume of €6.7 billion. At the same time, the first of a total of four TLTRO II operations is settled, in which 514 institutions borrow an overall amount of €399.3 billion. Banks also have the option on this date to make early repayments of their outstanding volumes from the first seven TLTRO I operations. A total of €367.9 billion in outstanding TLTRO I loans is repaid on this occasion. Taken together, the net liquidity effect of the repayments under the earlier TLTRO I operations, the eighth TLTRO I and the first TLTRO II thus comes to €38.2 billion.

27 September 2016

The ECB and the People’s Bank of China extend the bilateral currency swap agreement established in 2013 for another three years. The agreement has a maximum size of 350 billion Chinese renminbi and €45 billion.

28 September 2016

The second of a total of four TLTRO II operations is settled. It sees 249 institutions take up an overall volume of €45.3 billion. Simultaneously, €9.4 billion is paid back on earlier TLTRO I operations under the voluntary repayment option.

8 December 2016

The Governing Council of the ECB decides to extend the term of the APP and adjust the technical parameters. Purchases are intended to continue at their current monthly volume of €80 billion until March 2017. From April, the net monthly purchase of assets of €60 billion will run until December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.

To ensure the smooth implementation of asset purchases, the technical APP parameters will also be adjusted from January 2017. First, the Eurosystem will additionally purchase securities with a residual maturity of between one and two years; second, purchases of securities with a yield to maturity below the deposit rate will be allowed insofar as this is necessary for the implementation of the programme. 

15 December 2016

The Governing Council of the ECB decides that the asset-backed securities purchase programme (ABSPP) should be fully implemented by national central banks rather than relying on the support of external asset managers. As of 1 April 2017, the Nationale Bank van België/Banque Nationale de Belgique, the Banque de France, the Deutsche Bundesbank, the Banca d’Italia, De Nederlandsche Bank and the Banco de España will act as asset managers executing purchases on behalf of the Eurosystem.

21 December 2016

The third of a total of four TLTRO II operations is settled. It sees 200 institutions take up an overall volume of €62.2 billion. Simultaneously, €14.2 billion is paid back on earlier TLTRO I operations under the voluntary repayment option.

2017

9 March 2017

The ECB Governing Council announces that, from April 2017, it intends to continue its net asset purchases under the expanded asset purchase programme (APP) at a monthly pace of €60 billion until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. Since April 2016, purchases have been carried out at a monthly pace of €80 billion.

29 March 2017

The fourth and last of the second series of four targeted longer-term refinancing operations (TLTRO II) operations is conducted. It sees 474 institutions take up an overall volume of €233 billion. Simultaneously, €16.7 billion is paid back on the first series of TLTRO operations (TLTRO I) under the voluntary repayment option.

26 October 2017

The ECB Governing Council announces that, from January 2018, it intends to continue its net asset purchases under the APP at a monthly pace of €30 billion until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. Additionally, it stresses that the reinvestment of principal payments from maturing securities purchased under the APP – a measure decided upon back in December 2015 – will continue for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary.

Furthermore, the Governing Council decides to continue to conduct the main refinancing operations and three-month longer-term refinancing operations as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of the last reserve maintenance period of 2019.

2018

14 June 2018

The ECB Governing Council decides that purchases under the expanded asset purchase programme (APP) will continue, as previously announced, at a monthly pace of €30 billion net until the end of September 2018. Moreover, subject to confirmation of its current assessment of the medium-term inflation outlook by newly available data, the Governing Council aims to reduce the net volume of monthly asset purchases to €15 billion after the end of September 2018 and to discontinue purchases entirely after the end of December 2018. The Council still intends to uphold its policy of reinvesting the principal payments for an extended period of time after the end of the net purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

At the same time, it strengthens its forward guidance on the future development of key interest rates. It now expects that policy rates will remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.

13 September 2018

As indicated in June 2018, the Governing Council of the ECB decides to reduce net purchases under the APP to €15 billion per month after September 2018. It continues to anticipate the discontinuation of net purchases after the end of December 2018 subject to incoming data confirming its medium-term inflation outlook.

13 December 2018

The ECB Governing Council decides that net asset purchases under the APP will end in December 2018 and, at the same time, enhances its forward guidance on reinvestment. It intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

In addition, the ECB Governing Council adopts a raft of technical parameters for reinvestment. For the PSPP, for instance, the allocation across eligible jurisdictions will continue to be guided, on a stock basis, by the respective national central banks’ subscription to the ECB capital key, as amended over time. As a rule, redemptions will be reinvested in the jurisdiction in which principal repayments are made, but the portfolio allocation across jurisdictions will continue to be adjusted with a view to gradually bringing the share of the PSPP portfolio into closer alignment with the respective national central banks’ subscription to the ECB capital key.

2019

7 March 2019

The Governing Council of the European Central Bank adjusts the calendar-based element of its guidance on future key interest rate developments (“forward guidance”). It now expects key interest rates to remain unchanged at least through the end of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. The Governing Council also decides to launch a new series of seven targeted longer-term refinancing operations (TLTRO III). The operations will be conducted from September 2019 to March 2021. They are intended to ensure that bank lending conditions remain favourable and to contribute to the smooth transmission of monetary policy. Aside from this, the Governing Council extends its policy of full allotment in all its refinancing operations, stating that they will continue to be conducted as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of the reserve maintenance period starting in March 2021.

6 June 2019

The ECB Governing Council now expects policy interest rates to remain unchanged at least through the first half of 2020. Additionally, it sets the interest rate for each TLTRO III operation at an initial level of 10 basis points above the average rate applied to the Eurosystem’s main refinancing operations over the life of the respective TLTRO. Where the bank-specific benchmark for net lending is exceeded, this can be as low as the average interest rate on the deposit facility plus 10 basis points.

25 July 2019

The ECB Governing Council extends its forward guidance on policy rates to include an indication that they could be lowered further in future. It now expects key ECB interest rates to remain at their present or lower levels at least through the first half of 2020.

12 September 2019

The ECB Governing Council adopts an extensive package of monetary policy measures. It lowers the interest rate on the deposit facility by 10 basis points to an all-time low of −0.50%, but keeps the interest rates on main refinancing operations and the rate on the marginal lending facility unchanged. At the same time, it now expects key 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. This convergence should also be consistently reflected in underlying inflation dynamics. Furthermore, the Governing Council decides to restart net asset purchases under the asset purchase programme (APP) at a monthly pace of €20 billion. It expects these net purchases to run for as long as is necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates. As a further measure, the Governing Council adjusts the conditions for the TLTRO III. It extends the maturity of the individual operations from two to three years. Furthermore, it removes the previously announced interest rate premium of 10 basis points. Finally, the Governing Council introduces a two-tier system for reserve remuneration. Under this system, a part of banks’ holdings of excess liquidity on current accounts with the Eurosystem is remunerated at 0% instead of at the negative deposit facility rate. The exempt tier is determined as a multiple of the respective institution’s minimum reserve requirements. The multiplier is the same for all institutions and is initially set at a value of six. The two-tier system will enter into force in the seventh maintenance period, starting in October 2019. 

25 September 2019

The first of a total of seven TLTRO III operations is conducted. It sees 28 institutions borrow take up an overall volume of €3.4 billion. At the same time, €31.8 billion is paid back on the second series of targeted longer-term refinancing operations (TLTRO II) under the voluntary repayment option.

2 October 2019

The ECB publishes the euro short-term rate (€STR) for the first time as the new short-term benchmark rate for the unsecured money market.

18 December 2019

The second of a total of seven TLTRO III operations is conducted. It sees 122 institutions take up an overall volume of €97.7 billion. At the same time, €146.8 billion is paid back on TLTRO II operations under the voluntary repayment option.

2020

23 January 2020

The Governing Council of the European Central Bank (ECB) decides to launch a review of the Eurosystem’s monetary policy strategy. The review will focus in particular on the quantitative formulation of price stability, the monetary policy toolkit, economic and monetary analyses and communication practices. The Governing Council intends to complete the process by the end of the year.

12 March 2020

At its regular monetary policy meeting, the ECB Governing Council passes a package of monetary policy measures in response to the economic turmoil and increased uncertainty resulting from the spread of the coronavirus. It decides to add a temporary envelope of additional net asset purchases totalling €120 billion to the existing asset purchase programme (APP) until the end of the year in order to ensure a strong contribution from the private sector purchase programmes. In combination with the existing net asset purchases under the APP at a monthly pace of €20 billion, this is intended to support favourable financing conditions for the real economy in times of heightened uncertainty.

In addition, the terms of the third series of targeted longer-term refinancing operations (TLTRO III) are eased. The maximum total amount that TLTRO III counterparties will be entitled to borrow is raised from 30% to 50% of their stock of eligible loans as at 28 February 2019. Furthermore, the interest rate on these operations was lowered by 25 basis points for the period from June 2020 to June 2021. The interest rate for all participating banks in this period will thus be a maximum of 25 basis points below the average main refinancing rate. For banks whose eligible net lending exceeds the lending performance threshold of 0%, the interest rate may be as low as 25 basis points below the average interest rate on the deposit facility.

The Governing Council supplements these modifications to TLTRO III with a series of additional longer-term refinancing operations (LTROs) designed to immediately bridge the euro area financial system’s liquidity needs until the fourth TLTRO III operation is settled in June 2020. These operations, which will begin on 18 March, are allotted on a weekly basis and all mature on 24 June. Their interest rate is equivalent to the deposit facility rate.

15 March 2020

The Eurosystem, along with other major central banks, announces a coordinated action to enhance the provision of liquidity through standing US dollar liquidity swap line arrangements. From 16 March, the Eurosystem will offer weekly US dollar operations with an 84-day maturity in addition to its existing one-week operations. The pricing of all US dollar operations is to be lowered to the US dollar overnight index swap (OIS) rate plus 25 basis points. These changes are to remain in place for as long as appropriate to support the smooth functioning of US dollar funding markets.

18 March 2020

The ECB Governing Council passes a new temporary purchase programme with an overall envelope of €750 billion. The aim of the pandemic emergency purchase programme (PEPP) is to counter the risks to the monetary policy transmission mechanism and the Eurosystem’s objective of price stability posed by the outbreak and escalating diffusion of the coronavirus. Purchases under the PEPP comprise all asset categories eligible under the APP. For the purchases of public sector securities, the benchmark allocation across jurisdictions will continue to be the capital key of the national central banks. At the same time, purchases under the PEPP are conducted in a flexible manner. This allows for fluctuations in the distribution of purchase flows over time, across asset classes and among jurisdictions. Securities issued by the Greek government may likewise be purchased under the PEPP due to a waiver of the eligibility requirements. The Governing Council will terminate net asset purchases under the PEPP once it judges that the coronavirus crisis phase is over, but in any case not before the end of 2020. At the same time, it decides to expand the range of eligible assets under the corporate sector purchase programme (CSPP) to include non-financial commercial paper.

Finally, the Governing Council announces an easing of the collateral standards by adjusting the main risk parameters of the collateral framework.

2 April 2020

The ECB Governing Council decides to extend the timeline for the review of its monetary policy strategy on account of the acute challenges posed by the coronavirus pandemic. The conclusion of the strategy review will be postponed from the end of 2020 to mid-2021.

7 April 2020

The ECB Governing Council elaborates on the announcement of 18 March by introducing temporary collateral easing measures. First, it eases various requirements under the additional credit claim (ACC) frameworks. Second, it adopts general easing measures on the conditions for using credit claims as collateral and a waiver of the minimum credit quality requirements for Greek government bonds to be accepted as collateral in Eurosystem credit operations. Third, the Governing Council decides to temporarily increase its risk tolerance level in credit operations through a general reduction of collateral valuation haircuts.

22 April 2020

The ECB Governing Council supplements the decisions of 7 April with measures to mitigate the impact of possible rating downgrades on collateral availability. To this end, it will grandfather the eligibility of marketable assets used as collateral in Eurosystem credit operations until September 2021. Marketable assets (with the exception of asset-backed securities (ABSs)) and issuers of these assets that met the BBB- minimum credit quality requirement for collateral eligibility on 7 April 2020 will continue to be eligible in case of rating downgrades as long as their rating remains at or above credit quality step 5 (equivalent to a rating of BB) on the Eurosystem harmonised rating scale. These measures, including the decisions taken on 7 April, are to apply until September 2021.

30 April 2020

Following its regular monetary policy meeting, the ECB Governing Council lowers the interest rate on TLTRO III operations by a further 25 basis points from June 2020 to June 2021. The interest rate for all participating banks in this period will thus be a maximum of 50 basis points below the average main refinancing rate. For banks whose eligible net lending exceeds the lending performance threshold of 0% in the newly defined lending assessment period of 1 March 2020 to 31 March 2021, the interest rate applied from June 2020 to June 2021 will be 50 basis points below the average interest rate on the deposit facility.

Moreover, the Governing Council decides to conduct a new series of pandemic emergency longer-term refinancing operations (PELTROs). These operations are intended to provide liquidity support to the euro area financial system and contribute to preserving the smooth functioning of money markets after the expiry of the additional longer-term refinancing operations announced on 12 March. The interest rate will be 25 basis points below the average main refinancing operations rate applicable over the life of the respective PELTRO. The operations have decreasing tenors and different maturity dates. For example, the first operation has a tenor of 16 months, the last just 8 months.

4 June 2020

At its regular monetary policy meeting, the ECB Governing Council decides to expand the PEPP in response to the pandemic-related downward revision to inflation over the projection horizon. First, it increases the envelope for the programme by €600 billion to a total of €1,350 billion. Second, it extends the horizon for net purchases under the PEPP to at least the end of June 2021. In any case, net asset purchases under the PEPP will continue to be conducted until the Governing Council judges that the coronavirus crisis phase is over. Third, it decides to reinvest the maturing principal payments from 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 stance.

19 June 2020

In view of the improvements in US dollar funding conditions and the low demand at recent seven-day maturity US dollar liquidity-providing operations, the Eurosystem and other major central banks jointly decide to reduce the frequency of such operations from daily to three times per week. This operational change will be effective as of 1 July 2020.

25 June 2020

The ECB Governing Council sets up a new facility called the Eurosystem repo facility for central banks (EUREP) for non-euro area central banks. EUREP is introduced as a precautionary backstop. Under EUREP, the Eurosystem will provide euro liquidity to a broad set of central banks outside the euro area against adequate collateral, consisting of euro-denominated marketable debt securities issued by euro area central governments and supranational institutions. EUREP complements the ECB’s bilateral swap and repo lines and will be available until the end of June 2021.

20 August 2020

In view of continuing improvements in US dollar funding conditions and the low demand at recent seven-day maturity US dollar liquidity-providing operations, the ECB and other major central banks jointly decide to further reduce the frequency of these operations from three times per week to once per week. This operational change will be effective as from 1 September 2020.

10 December 2020

At the last monetary policy meeting of the year, the ECB Governing Council decides to increase the envelope of the PEPP by a further €500 billion to a total of €1,850 billion. It also extends the horizon for net asset purchases under the PEPP to at least the end of March 2022. If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope, the envelope need not be used in full. Equally, the envelope can be recalibrated if required to maintain favourable financing conditions to help counter the negative pandemic shock to the path of inflation. The reinvestment of the principal payments from maturing securities purchased under the PEPP is extended until at least the end of 2023.

The Governing Council also recalibrates the conditions on TLTRO III operations again. The period over which considerably more favourable terms will apply is extended by 12 months, to June 2022. Furthermore, the Eurosystem will conduct three additional operations between June and December 2021. Moreover, the total amount that counterparties will be entitled to borrow in TLTRO III operations is raised from 50% to 55% of their stock of eligible loans. In order to provide an incentive for banks to sustain the current level of bank lending, the recalibrated TLTRO III borrowing conditions will be made available only to banks that achieve a new lending performance target.

The Governing Council also expands the PELTROs and, over the course of 2021, will offer four additional operations allotted on a quarterly basis, each with a tenor of approximately one year and at unchanged terms.

The collateral easing measures adopted on 7 and 22 April 2020 are extended until June 2022.

Furthermore, EUREP and all temporary swap and repo lines with non-euro area central banks are extended until March 2022.

Finally, the Governing Council decides to continue conducting its regular lending operations as fixed rate tender procedures with full allotment at the prevailing conditions for as long as necessary.

2021

11 March 2021

Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council of the European Central Bank (ECB) expects purchases under the pandemic emergency purchase programme (PEPP) to be conducted at a significantly higher pace over the second quarter of 2021 than during the first months of the year. At the same time, it reaffirms its decision taken in December 2020 to continue to conduct net asset purchases under the PEPP with a total envelope of €1,850 billion until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over.

10 June 2021

Based on a joint assessment of financing conditions and the inflation outlook, the ECB Governing Council expects net asset purchases under the PEPP over the third quarter to continue to be conducted at a significantly higher pace than during the first months of the year. Net asset purchases will continue with an unchanged total envelope of €1,850 billion until at least the end of March 2022 and, in any case, until the Governing Council judges that the coronavirus crisis phase is over.

8 July 2021

Following the conclusion of its strategy review, the ECB Governing Council adopts its new monetary policy strategy. One key outcome is the adjustment of the inflation target: the Governing Council considers that price stability is best maintained by aiming for a 2% inflation target over the medium term. This target is symmetric, meaning negative and positive deviations of inflation from the target are equally undesirable. When the economy is operating close to the lower bound on nominal interest rates, it requires especially forceful or persistent monetary policy action to avoid negative deviations from the inflation target becoming entrenched. This may also imply a transitory period in which inflation is moderately above target.

Besides its inflation target, the Governing Council also decides on further adjustments following the strategy review’s conclusion; these relate, inter alia, to the integrated assessment of all factors that are relevant to monetary policy decisions in the context of economic analysis as well as monetary and financial analysis. In its monetary policy assessments, the Governing Council will also take into account inflation measures that include initial estimates of the costs of owner-occupied housing, provided that these have not yet been included in the Harmonised Index of Consumer Prices.

22 July 2021

The Governing Council revises its forward guidance on the key ECB interest rates in line with its monetary policy strategy in order to support its new symmetric inflation target of 2%. It expects the key interest rates to remain at their present or lower levels until it sees inflation reaching 2% well ahead of the end of its projection horizon and durably for the rest of the projection horizon. It must also judge that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at 2% over the medium term. In the Governing Council’s view, this may also imply a transitory period in which inflation is moderately above target.

9 September 2021

Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the PEPP than in the previous two quarters. Moreover, net asset purchases will continue with an unchanged anticipated total envelope of €1,850 billion until at least the end of March 2022 and, in any case, until the Governing Council judges that the coronavirus crisis phase is over.

16 December 2021

In the first quarter of 2022, the Governing Council expects to conduct net asset purchases under the PEPP at a lower pace than in the previous quarter. It will discontinue net asset purchases under the PEPP at the end of March 2022. Net purchases could also be resumed, if necessary, to counter negative shocks related to the pandemic.

In addition, the Governing Council decides to extend the reinvestment horizon for the PEPP. It now intends to reinvest the principal payments from maturing securities purchased under the PEPP until at least the end of 2024. In any case, the future roll-off of the PEPP portfolio will be managed to avoid interference with the appropriate monetary policy stance.

In the event of renewed market fragmentation related to the pandemic, PEPP reinvestments can be adjusted flexibly across time, asset classes and jurisdictions at any time. This could include purchasing bonds issued by the Hellenic Republic over and above rollovers of redemptions in order to avoid an interruption of purchases in that jurisdiction.

Furthermore, the ECB Governing Council decides on a monthly net purchase pace of €40 billion in the second quarter and €30 billion in the third quarter of 2022 under the asset purchase programme (APP). This is in line with a step-by-step reduction in asset purchases and is intended to ensure that the monetary policy stance remains consistent with inflation stabilising at its target over the medium term. From October 2022 onwards, the Governing Council will maintain net asset purchases under the APP at a monthly pace of €20 billion for as long as necessary to reinforce the accommodative impact of its policy rates. The Governing Council expects net purchases to end shortly before it starts raising the key ECB interest rates.

The Governing Council will continue to monitor funding conditions for banks and ensure that the maturing of operations under the third series of targeted longer-term refinancing operations (TLTRO III) does not hamper the smooth transmission of its monetary policy. It will also regularly assess how targeted lending operations are contributing to its monetary policy stance. As announced, it expects the special conditions applicable under TLTRO III to end in June 2022. The Governing Council will also assess the appropriate calibration of its two-tier system for reserve remuneration so that the negative interest rate policy does not limit banks’ intermediation capacity in an environment of ample excess liquidity.

2022

10 March 2022

Against the backdrop of further increasing inflationary pressures, the Governing Council of the European Central Bank (ECB) decides to reduce net purchases under the asset purchase programme (APP) at a faster pace than previously envisaged in December 2021. In line with this, monthly net asset purchases in April will amount to €40 billion. Purchases will then be reduced to €30 billion in May and €20 billion in June. The Governing Council announces its intention to conclude net asset purchases in the third quarter if the incoming data support the expectation that the medium-term inflation outlook will not fall below the 2% target again after the end of its net asset purchases.

The Governing Council also amends its forward guidance on policy rates. According to the new wording, it will make any adjustments to the key ECB interest rates “some time” after the end of net purchases under the APP. It expects such adjustments to be gradual.

9 June 2022

The Governing Council decides, on the basis of its updated assessment of the inflation outlook, to take further steps in normalising its monetary policy. It decides to end net purchases under the APP as of 1 July 2022. It announces its intention to continue full reinvestment of principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates and, in any case, for as long as necessary to maintain ample liquidity and an appropriate monetary policy stance.

In addition, the Governing Council concludes that the conditions formulated in the previous year for raising the key ECB interest rates have now been satisfied. Accordingly, and in line with the ECB’s policy sequencing, the Governing Council expresses its intention to raise the key ECB interest rates by 25 basis points at its July monetary policy meeting. It also communicates that it expects to raise the key ECB interest rates again in September, and possibly by a larger increment. It furthermore anticipates a gradual but sustained path of further increases in interest rates beyond September.

15 June 2022

At an ad hoc meeting, the Governing Council decides that it will apply flexibility in reinvesting redemptions coming due in the pandemic emergency purchase programme (PEPP) portfolio. This specifically means that PEPP redemptions will no longer necessarily be reinvested in the jurisdictions in which they fall due. Instead, it will, where appropriate, be possible to reinvest those redemptions in jurisdictions in which the Governing Council considers orderly transmission to be at risk due to the pandemic.

The Governing Council also decides to mandate the relevant Eurosystem Committees together with the ECB services to accelerate the completion of the design of a new anti-fragmentation instrument.

21 July 2022

The Governing Council takes further steps to ensure inflation returns to its 2% target over the medium term. It judges that, in light of the further increase in inflation risks, it is appropriate to take a larger first step on its policy rate normalisation path than was signalled at its meeting on 9 June. It therefore decides to raise the three key ECB interest rates by 50 basis points. Accordingly, the interest rate on the deposit facility stands at 0%, while the interest rate on the main refinancing operations is 0.5% and the interest rate on the marginal lending facility is 0.75%. The Governing Council furthermore reaffirms its view that further normalisation of interest rates will be appropriate. The future path of policy rates will continue to be data-dependent, and interest rate decisions will be made on a meeting-by-meeting basis.

Above and beyond this, the Governing Council approves a new instrument, the Transmission Protection Instrument (TPI). As the Governing Council continues normalising monetary policy, the TPI will ensure that the monetary policy stance is transmitted smoothly across all euro area countries. This will allow the Governing Council to more effectively deliver on its price stability mandate. The TPI can be activated to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across the euro area. Under the TPI, the Eurosystem will be able to make secondary market purchases of securities issued in jurisdictions experiencing a deterioration in financing conditions not warranted by country-specific fundamentals.

8 September 2022

The Governing Council decides to raise the three key ECB interest rates by 75 basis points. Accordingly, the interest rate on the deposit facility stands at 0.75%, while the interest rates on the main refinancing operations and the marginal lending facility are 1.25% and 1.5%, respectively.

The reason for this major interest rate step is that inflation remains far too high and is likely to stay above target for an extended period. The Governing Council expects to raise interest rates further over the next several meetings to dampen aggregate demand and guard against the risk of a persistent upward shift in inflation expectations.

It also decides to suspend the two-tier system for the remuneration of excess reserves. Following the raising of the deposit facility rate to above zero, this system is no longer necessary.

27 October 2022

The Governing Council decides to raise the three key ECB interest rates further, by 75 basis points. Accordingly, the interest rate on the deposit facility stands at 1.5%, while the interest rates on the main refinancing operations and the marginal lending facility are 2% and 2.25%, respectively.

The Governing Council also decides to change the terms and conditions of the third series of targeted longer-term refinancing operations (TLTRO III). The interest rates payable by banks for TLTRO III operations will be adjusted with effect from 23 November 2022. From that date until the maturity date or early repayment date of each outstanding operation, the interest rate will be indexed to the average applicable key ECB interest rates over this period. In view of the unexpected and extraordinary rise in inflation, the recalibration must be carried out to ensure consistency with the broader monetary policy normalisation process. It is intended to reinforce the transmission of policy rate increases to bank lending conditions.

Furthermore, the Governing Council adjusts the remuneration of minimum reserves held by credit institutions with the Eurosystem. In the future, these will be remunerated at the interest rate on the deposit facility, rather than at the main refinancing operations rate.

15 December 2022

The Governing Council decides to raise the three key ECB interest rates by 50 basis points. Accordingly, the interest rate on the deposit facility stands at 2%, while the interest rates on the main refinancing operations and the marginal lending facility are 2.5% and 2.75%, respectively. Based on the substantial upward revision of the inflation outlook, the Governing Council expects to raise its key interest rates further. It judges that interest rates will still have to rise significantly at a steady pace. This will enable them to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target. The Governing Council’s future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.

Furthermore, the Governing Council announces principles for normalising the Eurosystem’s monetary policy securities holdings. From the beginning of March 2023 onwards, the APP portfolio will decline at a measured and predictable pace, as the Eurosystem will not reinvest all of the principal payments from maturing securities. The decline in holdings will amount to €15 billion per month on average until the end of the second quarter of 2023. Its subsequent pace will be determined over time. At its meeting in February 2023, the Governing Council will announce the detailed parameters for reducing the APP holdings.

Finally, the Governing Council announces that it intends to review its operational framework for steering short-term interest rates by the end of 2023. This will provide information regarding the endpoint of the balance sheet normalisation process.