Plans to end investments in PEPP at end 2024 (Il Sole 24 Ore Radiocor) - Frankfurt, 18 Jul - The ECB added that the portfolio of the asset purchase programme (APP) is declining at a measured and predictable pace as it no longer reinvests the principal payments from maturing securities.

The ECB will no longer reinvest all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by 7.5 billion euros per month on average. The Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024, it added.

The bank will continue "applying flexibility in reinvesting redemptions coming due in the PEPP portfolio, with a view to countering risks to the monetary policy transmission mechanism related to the pandemic," it added.

"As banks are repaying the amounts borrowed under the targeted longer-term refinancing operations, the Governing Council will regularly assess how targeted lending operations and their ongoing repayment are contributing to its monetary policy stance," it noted.

The bank said that the "Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation returns to its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission. Moreover, 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.".

AAA-Web

(RADIOCOR) 18-07-24 14:38:43 (0431) 5 NNNN