Vi bruker en rekke cookies for å forsikre oss om at du får den beste brukeropplevelsen. Ved kontinuerlig bruk av denne nettsiden, godtar du bruken vår av cookies. Du kan lese mer om policyen vår for cookies her, eller ved å følge linken nederst på alle sidene på nettstedet vårt.
There is mounting speculation that the European Central Bank (ECB) will announce more tapering of its quantitative easing (QE) programme on Thursday 26 October 2017. Analysts expect the bank’s Governing Council, chaired by ECB President Mario Draghi, to pursue a ‘lower for longer’ policy. This phrase, originally used to describe how interest rates will remain low in the post-crisis period, is now being used to describe how the bank may reduce the amount of monthly bond purchases but extend the programme.
A change to QE is expected to take the asset purchase programme from roughly €60 billion a month to somewhere in the region of €20-30 billion, and extend the programme into late 2018 or early 2019. This follows the changes the bank made in April, when it lowered asset purchases by €20 billion a month and extended the programme to the end of 2017.
At first glance, a cut to QE seems somewhat counterintuitive. Inflation was 1.5% in September, someway off the bank’s target rate of just under 2%. However, the bank’s hands are tied. It is only allowed to purchase up to one-third of each country’s debt, and it will soon hit this figure in Germany, Portugal and the Netherlands unless QE is tapered.
As inflation is still below target, any new taper would be designed to keep the inflation-boosting effects of QE going as long as possible – and reduce the potential shock impact of any policy change on the equity and foreign exchange (FX) markets. However, any change of policy is still expected to affect these markets, so we’re likely to see price movement in major currency pairs such as EUR/USD over the coming days.
The Governing Council’s interest rate and QE decisions will be published at 12.45pm (UK time) on Thursday 26 October 2017. A press conference is scheduled for 1.30pm (UK time) the same day, in which Draghi will give a speech and answer questions from journalists.