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ECB Leaves Interest Rates Unchanged; Maintains Asset Purchases

The European Central Bank on Thursday left its key interest rates and the size of asset purchases unchanged as policymakers weigh the effect of the previous actions.

The main refi rate was left unchanged at a record low zero and the deposit rate at -0.50 percent, in line with economists' expectations.

The lending rate was kept at 0.25 percent as expected.

"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," the bank said.

The ECB also said it will continue its purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of EUR 1,350 billion.

"These purchases contribute to easing the overall monetary policy stance, thereby helping to offset the pandemic-related downward shift in the projected path of inflation...," the central bank said.

"This allows the Governing Council to effectively stave off risks to the smooth transmission of monetary policy."

Further, the bank said the net purchases under the asset purchase programme (APP) will continue at a monthly pace of EUR 20 billion, together with the purchases under the additional EUR 120 billion temporary envelope until the end of the year.

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