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ECB To Start Trimming Asset Purchases In January

Kitco News

(Kitco News) - The European Central Bank’s Governing Council announced Thursday that its bond-buying program will be reduced starting in January.

Buying under the asset purchase program will continue at the current monthly pace of 60 billion euros until the end of December, the central bank said.

“From January 2018, the net asset purchases are intended to continue 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,” the ECB said in a prepared statement.

If the outlook becomes “less favorable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation,” the Governing Council stands ready to increase the asset purchase program, the statement said.

Meanwhile, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and minus 0.40%, respectively, the ECB said. The Governing Council also said it continues to expect key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.

The main refinancing operations and the three-month longer-term refinancing operations 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 last reserve maintenance period of 2019.

ECB President Mario Draghi will conduct a news conference later this morning.

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