ECB Announces End of Quantitative Easing Program, as Expected
At the end of today's meeting, the European Central Bank left key rates unchanged, as expected. The main refinancing rate remained at the level of 0.00%, marginal lending at the level of 0.25%, and the deposit rate at the level of -0.40%.
The ECB also confirmed that the quantitative easing program (QE) will be stopped this month. Still, the Bank said it will continue to reinvest cash from maturing bonds for an extended period of time. The ECB's asset purchasing program — under which the bank bought more than 2.6 trillion euros ($2.9 trillion) — was introduced in March 2015 in a bid to rescue the euro zone economy from deflationary forces and rebuild confidence.
The European Central Bank also cut its growth forecasts and tweaked inflation projections, after the Eurozone economy dipped more than expected in the second half of the year. For 2019, the ECB sees the Eurozone economy expanding by 1.7%, against a previous projection of 1.8%.
As for inflation, the ECB raised slightly its 2018 forecast to 1.8% but cut its 2019 forecast to 1.6% from 1.7% earlier. ECB expects 2021 inflation at 1.8%.