The rate guidance was also confirmed. The Governing Council expects the key ECB interest rates to remain at or below current levels until you see inflation prospects converge firmly on a sufficiently near but less than 2% level in its projection horizon and this convergence will not be reflected coherently in the dynamics of underlying inflation.
QE starts in November at a rate of 20 billion per month
As decided in the last meeting of the Governing Council, net purchases will resume as part of the Board's activity purchase program (PAA) at a monthly rate of 20 billion euros starting on 1 November. The Governing Council expects that it will continue as long as necessary to strengthen the impact of accommodating its benchmark rates and that they will end shortly before it will begin to raise the key ECB rates.
The Board of Directors, the statement continues, intends to continue to reinvest, fully, the capital repaid on the securities falling due within the PAA for a prolonged period of time after the date on which it begins to raise the reference ECB interest rates, and in any case as long as it is necessary to maintain favorable liquidity conditions and a large degree of monetary accommodation.
The ECB President, Mario Draghi, will explain the reasons for these decisions at the press conference which will take place this afternoon at 2.30 pm (Central European time).
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