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the president of the ecb will comment on the considerations underlying these decisions at a press conference starting at 14:30 cet today.
the interest rate on the main refinancing operations of the eurosystem will be decreased by 25 basis points to 1.25%, starting from the operation to be settled on 8 april 2009.
the interest rate on the marginal lending facility will be decreased by 25 basis points to 2.25%, with effect from 8 april 2009.
the interest rate on the deposit facility will be decreased by 25 basis points to 0.25%, with effect from 8 april 2009.
the governing council of the ecb expresses its deep grief at the unprecedented and tragic events of terrorism which occurred in the united states. it offers its deepest sympathy and condolences to all those affected by these dreadful acts. the fundamental strength and resilience of the us economic system will not be impaired by recent events.
at today's meeting the governing council decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 5.25% and 3.25% respectively.
the governing council will carefully monitor further developments in the us and the world economy.
the governing council reconfirms that the eurosystem stands ready to support the normal functioning of markets. in this context, the eurosystem has conducted liquidity-providing fine tuning operations yesterday and today. while the expectation is that normal market conditions will prevail in the period ahead, the eurosystem will continue to monitor developments in financial markets and take action if necessary. the eurosystem is co-ordinating its activity with the federal reserve system of the united states and other major central banks of the world.
regarding non-standard monetary policy measures, the governing council confirms that the net asset purchases, at the current monthly pace of €30 billion, are intended to run 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 eurosystem will reinvest the principal payments from maturing securities purchased under the asset purchase programme for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary. this will contribute both to favourable liquidity conditions and to an appropriate monetary policy stance.
regarding non-standard monetary policy measures, the governing council confirms that the net asset purchases, at the new monthly pace of €30 billion, are intended to run 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. if the outlook becomes less favourable, 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 programme (app) in terms of size and/or duration. the eurosystem will reinvest the principal payments from maturing securities purchased under the app for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary. this will contribute both to favourable liquidity conditions and to an appropriate monetary policy stance.
the interest rate on the main refinancing operations of the eurosystem will be increased by 25 basis points to 1.25%, starting from the operation to be settled on 13 april 2011.
the interest rate on the marginal lending facility will be increased by 25 basis points to 2.00%, with effect from 13 april 2011.
the interest rate on the deposit facility will be increased by 25 basis points to 0.50%, with effect from 13 april 2011.
high inflation is a major challenge for all of us. the governing council will make sure that inflation returns to its 2% target over the medium term.
in may inflation again rose significantly, mainly because of surging energy and food prices, including due to the impact of the war. but inflation pressures have broadened and intensified, with prices for many goods and services increasing strongly. eurosystem staff have revised their baseline inflation projections up significantly. these projections indicate that inflation will remain undesirably elevated for some time. however, moderating energy costs, the easing of supply disruptions related to the pandemic and the normalisation of monetary policy are expected to lead to a decline in inflation. the new staff projections foresee annual inflation at 6.8% in 2022, before it is projected to decline to 3.5% in 2023 and 2.1% in 2024 – higher than in the march projections. this means that headline inflation at the end of the projection horizon is projected to be slightly above the governing council’s target. inflation excluding energy and food is projected to average 3.3% in 2022, 2.8% in 2023 and 2.3% in 2024 – also above the march projections.
russia’s unjustified aggression towards ukraine continues to weigh on the economy in europe and beyond. it is disrupting trade, is leading to shortages of materials, and is contributing to high energy and commodity prices. these factors will continue to weigh on confidence and dampen growth, especially in the near term. however, the conditions are in place for the economy to continue to grow on account of the ongoing reopening of the economy, a strong labour market, fiscal support and savings built up during the pandemic. once current headwinds abate, economic activity is expected to pick up again. this outlook is broadly reflected in the eurosystem staff projections, which foresee annual real gdp growth at 2.8% in 2022, 2.1% in 2023 and 2.1% in 2024. compared with the march projections, the outlook has been revised down significantly for 2022 and 2023, while for 2024 it has been revised up.
on the basis of its updated assessment, the governing council decided to take further steps in normalising its monetary policy. throughout this process, the governing council will maintain optionality, data-dependence, gradualism and flexibility in the conduct of monetary policy.
the governing council decided to end net asset purchases under its asset purchase programme (app) as of 1 july 2022. the governing council 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 ample liquidity conditions and an appropriate monetary policy stance.
as concerns the pandemic emergency purchase programme (pepp), the governing council intends to reinvest the principal payments from maturing securities purchased under the programme 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, which could impair the transmission of monetary policy to the greek economy while it is still recovering from the fallout from the pandemic. net purchases under the pepp could also be resumed, if necessary, to counter negative shocks related to the pandemic.
the governing council undertook a careful review of the conditions which, according to its forward guidance, should be satisfied before it starts raising the key ecb interest rates. as a result of this assessment, the governing council concluded that those conditions have been satisfied.
accordingly, and in line with the governing council’s policy sequencing, the governing council intends to raise the key ecb interest rates by 25 basis points at its july monetary policy meeting. in the meantime, the governing council decided to leave the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50% respectively.
looking further ahead, the governing council expects to raise the key ecb interest rates again in september. the calibration of this rate increase will depend on the updated medium-term inflation outlook. if the medium-term inflation outlook persists or deteriorates, a larger increment will be appropriate at the september meeting.
beyond september, based on its current assessment, the governing council anticipates that a gradual but sustained path of further increases in interest rates will be appropriate. in line with the governing council’s commitment to its 2% medium-term target, the pace at which the governing council adjusts its monetary policy will depend on the incoming data and how it assesses inflation to develop in the medium term.
the governing council will continue to monitor bank funding conditions 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. the governing council will also regularly assess how targeted lending operations are contributing to its monetary policy stance. as announced previously, the special conditions applicable under tltro iii will end on 23 june 2022.
the governing council stands ready to adjust all of its instruments, incorporating flexibility if warranted, to ensure that inflation stabilises at its 2% target over the medium term. the pandemic has shown that, under stressed conditions, flexibility in the design and conduct of asset purchases has helped to counter the impaired transmission of monetary policy and made the governing council’s efforts to achieve its goal more effective. within the ecb’s mandate, under stressed conditions, flexibility will remain an element of monetary policy whenever threats to monetary policy transmission jeopardise the attainment of price stability.
the governing council today decided to keep the three key ecb interest rates unchanged. the incoming information has broadly confirmed its previous assessment of the medium-term inflation outlook. inflation is still expected to stay too high for too long, and domestic price pressures remain strong. at the same time, inflation dropped markedly in september, including due to strong base effects, and most measures of underlying inflation have continued to ease. the governing council’s past interest rate increases continue to be transmitted forcefully into financing conditions. this is increasingly dampening demand and thereby helps push down inflation.
the governing council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. based on its current assessment, the governing council considers that the key ecb interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal. the governing council’s future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary.
the governing council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction. in particular, the governing council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
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 4.50%, 4.75% and 4.00% respectively.
the governing council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to its 2% medium-term target. accordingly, the governing council today decided to raise the three key ecb interest rates by 50 basis points and it expects to raise them further. in view of the underlying inflation pressures, the governing council intends to raise interest rates by another 50 basis points at its next monetary policy meeting in march and it will then evaluate the subsequent path of its monetary policy. keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations.
in any event, the governing council’s future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.
the governing council today also decided on the modalities for reducing the eurosystem’s holdings of securities under the asset purchase programme (app). as communicated in december, the app portfolio will decline by €15 billion per month on average from the beginning of march until the end of june 2023, and the subsequent pace of portfolio reduction will be determined over time. partial reinvestments will be conducted broadly in line with current practice. in particular, the remaining reinvestment amounts will be allocated proportionally to the share of redemptions across each constituent programme of the app and, under the public sector purchase programme (pspp), to the share of redemptions of each jurisdiction and across national and supranational issuers. for the eurosystem’s corporate bond purchases, the remaining reinvestments will be tilted more strongly towards issuers with a better climate performance. without prejudice to the ecb’s price stability objective, this approach will support the gradual decarbonisation of the eurosystem’s corporate bond holdings, in line with the goals of the paris agreement.
the detailed modalities for reducing the app holdings are described in a separate press release to be published at 15:45 cet.
the governing council decided to raise the three key ecb interest rates by 50 basis points. accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 3.00%, 3.25% and 2.50% respectively, with effect from 8 february 2023.
the governing council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the app until the end of february 2023. subsequently, 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 will amount to €15 billion per month on average until the end of june 2023 and its subsequent pace will be determined over time.
the interest rate on the main refinancing operations of the eurosystem will be decreased by 25 basis points to 0.75%, starting from the operation to be settled on 11 july 2012.
the interest rate on the marginal lending facility will be decreased by 25 basis points to 1.50%, with effect from 11 july 2012.
the interest rate on the deposit facility will be decreased by 25 basis points to 0.00%, with effect from 11 july 2012.
at today’s meeting, which was held in athens, the governing council of the ecb decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 2.00%, 3.00% and 1.00% respectively.
the president of the ecb will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. (c.e.t.) today.
at today's meeting the governing council of the ecb decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.75%, 5.75% and 3.75% respectively.
the president of the ecb will comment on the considerations underlying these decisions at a
starting at 2.30 p.m. today.
the governing council today decided to raise the three key ecb interest rates by 75 basis points. with this third major policy rate increase in a row, the governing council has made substantial progress in withdrawing monetary policy accommodation. the governing council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target. the governing council will base the future policy rate path on the evolving outlook for inflation and the economy, following its meeting-by-meeting approach.
inflation remains far too high and will stay above the target for an extended period. in september, euro area inflation reached 9.9%. in recent months, soaring energy and food prices, supply bottlenecks and the post-pandemic recovery in demand have led to a broadening of price pressures and an increase in inflation. the governing council’s monetary policy is aimed at reducing support for demand and guarding against the risk of a persistent upward shift in inflation expectations.
the governing council also decided to change the terms and conditions of the third series of targeted longer-term refinancing operations (tltro iii).
during the acute phase of the pandemic, this instrument played a key role in countering downside risks to price stability. today, in view of the unexpected and extraordinary rise in inflation, it needs to be recalibrated to ensure that it is consistent with the broader monetary policy normalisation process and to reinforce the transmission of policy rate increases to bank lending conditions.
the governing council therefore decided to adjust the interest rates applicable to tltro iii from 23 november 2022 and to offer banks additional voluntary early repayment dates.
finally, in order to align the remuneration of minimum reserves held by credit institutions with the eurosystem more closely with money market conditions, the governing council decided to set the remuneration of minimum reserves at the ecb’s deposit facility rate.
the details of the changes to the tltro iii terms and conditions are described in a separate press release to be published at 15:45 cet. another technical press release, detailing the change to the remuneration of minimum reserves, will also be published at 15:45 cet.
the governing council decided to raise the three key ecb interest rates by 75 basis points. accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 2.00%, 2.25% and 1.50% respectively, with effect from 2 november 2022.
the governing council 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 started raising the key ecb interest rates and, in any case, for as long as necessary to maintain ample liquidity conditions and an appropriate monetary policy stance.
the governing council decided to adjust the interest rates applicable to tltro iii. from 23 november 2022 until the maturity date or early repayment date of each respective outstanding tltro iii operation, the interest rate on tltro iii operations will be indexed to the average applicable key ecb interest rates over this period. the governing council also decided
to offer banks additional voluntary early repayment dates. in any case, the governing council will regularly assess how targeted lending operations are contributing to its monetary policy stance.
the governing council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises at its 2% target over the medium term. the transmission protection instrument is available to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across all euro area countries, thus allowing the governing council to more effectively deliver on its price stability mandate.
at today’s meeting, which was held in riga, the governing council of the ecb undertook a careful review of the progress towards a sustained adjustment in the path of inflation, also taking into account the latest eurosystem staff macroeconomic projections, measures of price and wage pressures, and uncertainties surrounding the inflation outlook.
based on this review the governing council made the following decisions:
first, as regards non-standard monetary policy measures, the governing council will continue to make net purchases under the asset purchase programme (app) at the current monthly pace of €30 billion until the end of september 2018. the governing council anticipates that, after september 2018, subject to incoming data confirming the governing council’s medium-term inflation outlook, the monthly pace of the net asset purchases will be reduced to €15 billion until the end of december 2018 and that net purchases will then end.
second, the governing council intends to maintain its policy of reinvesting the principal payments from maturing securities purchased under the app for an extended period of time after the end of the net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.
third, the governing council decided that 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 -0.40% respectively. the governing council expects the key ecb interest rates to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with the current expectations of a sustained adjustment path.
today’s monetary policy decisions maintain the current ample degree of monetary accommodation that will ensure the continued sustained convergence of inflation towards levels that are below, but close to, 2% over the medium term.
in the current environment of risks clearly tilted to the downside, the governing council will carefully assess the incoming information, including the dynamics of the pandemic, prospects for a rollout of vaccines and developments in the exchange rate. the new round of eurosystem staff macroeconomic projections in december will allow a thorough reassessment of the economic outlook and the balance of risks. on the basis of this updated assessment, the governing council will recalibrate its instruments, as appropriate, to respond to the unfolding situation and to ensure that financing conditions remain favourable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path. this will foster the convergence of inflation towards its aim in a sustained manner, in line with its commitment to symmetry.
in the meantime, the governing council of the ecb took the following monetary policy decisions:
(1) 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 -0.50% respectively. the governing council expects the key ecb 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, and such convergence has been consistently reflected in underlying inflation dynamics.
(2) the governing council will continue its purchases under the pandemic emergency purchase programme (pepp) with a total envelope of €1,350 billion. these purchases contribute to easing the overall monetary policy stance, thereby helping to offset the downward impact of the pandemic on the projected path of inflation. the purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions. this allows the governing council to effectively stave off risks to the smooth transmission of monetary policy. the governing council will conduct net asset purchases under the pepp until at least the end of june 2021 and, in any case, until it judges that the coronavirus crisis phase is over. the governing council will reinvest the principal payments from maturing 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 policy stance.
(3) net purchases under the asset purchase programme (app) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year. the governing council continues to expect monthly net asset purchases under the app to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ecb interest rates. the governing council 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.
(4) the governing council will also continue to provide ample liquidity through its refinancing operations. in particular, the third series of targeted longer-term refinancing operations (tltro iii) remains an attractive source of funding for banks, supporting bank lending to firms and households.
at today’s meeting the governing council of the european central bank (ecb) decided that 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 -0.40% respectively. the governing council expects the key ecb interest rates to 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.
regarding non-standard monetary policy measures, the governing council will continue to make net purchases under the asset purchase programme (app) at the new monthly pace of €15 billion until the end of december 2018. the governing council anticipates that, subject to incoming data confirming the medium-term inflation outlook, net purchases will then end. the governing council intends to reinvest the principal payments from maturing securities purchased under the app for an extended period of time after the end of the net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.
(1) the interest rate on the main refinancing operations of the eurosystem will be decreased by 5 basis points to 0.00%, starting from the operation to be settled on 16 march 2016.
(2) the interest rate on the marginal lending facility will be decreased by 5 basis points to 0.25%, with effect from 16 march 2016.
(3) the interest rate on the deposit facility will be decreased by 10 basis points to -0.40%, with effect from 16 march 2016.
(4) the monthly purchases under the asset purchase programme will be expanded to €80 billion starting in april.
(5) investment grade euro-denominated bonds issued by non-bank corporations established in the euro area will be included in the list of assets that are eligible for regular purchases.
(6) a new series of four targeted longer-term refinancing operations (tltro ii), each with a maturity of four years, will be launched, starting in june 2016. borrowing conditions in these operations can be as low as the interest rate on the deposit facility.
the minimum bid rate on the main refinancing operations will be reduced by 0.50 percentage point to 2.00%, starting from the operation to be settled on 9 june 2003.
the interest rate on the marginal lending facility will be reduced by 0.50 percentage point to 3.00%, with effect from 6 june 2003.
the interest rate on the deposit facility will be reduced by 0.50 percentage point to 1.00%, with effect from 6 june 2003.
the minimum bid rate on the main refinancing operations of the eurosystem will be increased by 25 basis points to 3.75%, starting from the operation to be settled on 14 march 2007.
the interest rate on the marginal lending facility will be increased by 25 basis points to 4.75%, with effect from 14 march 2007.
the interest rate on the deposit facility will be increased by 25 basis points to 2.75%, with effect from 14 march 2007.
at today’s meeting the governing council of the european central bank (ecb) decided that 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 -0.40% respectively. the governing council expects the key ecb interest rates to remain at their present or lower levels at least through the first half of 2020, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to its aim over the medium term.
the governing council also underlined the need for a highly accommodative stance of monetary policy for a prolonged period of time, as inflation rates, both realised and projected, have been persistently below levels that are in line with its aim. accordingly, if the medium-term inflation outlook continues to fall short of its aim, the governing council is determined to act, in line with its commitment to symmetry in the inflation aim. it therefore stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner.
in this context, the governing council has tasked the relevant eurosystem committees with examining options, including ways to reinforce its forward guidance on policy rates, mitigating measures, such as the design of a tiered system for reserve remuneration, and options for the size and composition of potential new net asset purchases.
the governing council today decided to keep the three key ecb interest rates unchanged. while inflation has dropped in recent months, it is likely to pick up again temporarily in the near term. according to the latest eurosystem staff projections for the euro area, inflation is expected to decline gradually over the course of next year, before approaching the governing council’s 2% target in 2025. overall, staff expect headline inflation to average 5.4% in 2023, 2.7% in 2024, 2.1% in 2025 and 1.9% in 2026. compared with the september staff projections, this amounts to a downward revision for 2023 and especially for 2024.
underlying inflation has eased further. but domestic price pressures remain elevated, primarily owing to strong growth in unit labour costs. eurosystem staff expect inflation excluding energy and food to average 5.0% in 2023, 2.7% in 2024, 2.3% in 2025 and 2.1% in 2026.
the past interest rate increases continue to be transmitted forcefully to the economy. tighter financing conditions are dampening demand, and this is helping to push down inflation. eurosystem staff expect economic growth to remain subdued in the near term. beyond that, the economy is expected to recover because of rising real incomes – as people benefit from falling inflation and growing wages – and improving foreign demand. eurosystem staff therefore see growth picking up from an average of 0.6% for 2023 to 0.8% for 2024, and to 1.5% for both 2025 and 2026.
the governing council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction. in particular, its interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
the key ecb interest rates are the primary tool for setting the monetary policy stance. the governing council also decided today to advance the normalisation of the eurosystem’s balance sheet. it intends to continue to reinvest, in full, the principal payments from maturing securities purchased under the pandemic emergency purchase programme (pepp) during the first half of 2024. over the second half of the year, it intends to reduce the pepp portfolio by €7.5 billion per month on average. the governing council intends to discontinue reinvestments under the pepp at the end of 2024.
the governing council judges that the progress on economic recovery and towards its medium-term inflation target permits a step-by-step reduction in the pace of its asset purchases over the coming quarters. but monetary accommodation is still needed for inflation to stabilise at the 2% inflation target over the medium term. in view of the current uncertainty, the governing council needs to maintain flexibility and optionality in the conduct of monetary policy. with this is mind, the governing council took the following decisions:
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.
the governing council decided 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.
the pandemic has shown that, under stressed conditions, flexibility in the design and conduct of asset purchases has helped to counter the impaired transmission of monetary policy and made efforts to achieve the governing council’s goal more effective. within our mandate, under stressed conditions, flexibility will remain an element of monetary policy whenever threats to monetary policy transmission jeopardise the attainment of price stability. in particular, 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, which could impair the transmission of monetary policy to the greek economy while it is still recovering from the fallout of the pandemic. net purchases under the pepp could also be resumed, if necessary, to counter negative shocks related to the pandemic.
in line with a step-by-step reduction in asset purchases and to ensure that the monetary policy stance remains consistent with inflation stabilising at its target over the medium term, the governing council decided on a monthly net purchase pace of €40 billion in the second quarter and €30 billion in the third quarter under the app. 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.
in support of its symmetric 2% inflation target and in line with its monetary policy strategy, the governing council expects the key ecb 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, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at 2% over the medium term. this may also imply a transitory period in which inflation is moderately above target.
the governing council will continue to monitor bank funding conditions 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. the governing council 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 next year. 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.
the governing council stands ready to adjust all of its instruments, as appropriate and in either direction, to ensure that inflation stabilises at its 2% target over the medium term.
the governing council decided to reconfirm its very accommodative monetary policy stance.