ECB will reinvest proceeds from APP past date of first rate hike
Rate-setters at the European Central Bank stayed put on interest rates but tweaked their so-called 'forward guidance' as regards the reinvestment of the proceeds from its asset purchase programme.
Up until Thursday, the Governing Council had said that it would continue to reinvest those funds "for an extended period of time" past the end of its bond buying programme, which it confirmed would stop at year-end 2018.
But now, the GC had refined its guidance, saying reinvestment would continue for "an extended period of time past the date when it starts raising the key ECB interest rates."
According to Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics: "This statement shouldn't be a big surprise, but the reference to continued re-investment past the point at which the ECB raises interest rates suggests that the central bank intends to continue this policy for 12-to-18 months, at least, based on the most recent rate expectations.
"We think reinvestment will continue until the end of 2020, at the very least."
The ECB's policy statement was otherwise unchanged from the last time around.
As expected, the monetary authority kept the interest rate on its main refinancing operations, marginal lending facility and the lending facility unchanged at 0.00%, 0.25% and -0.40%, respectively.
It also reiterated that its key interest rates would remain at their present levels " at least through the summer of 2019".