The European Central Bank (ECB) decided at their December policy meeting on Thursday to leave interest rates unchanged and extended their quantitative easing program through December 2017, even as they gradually taper their bond purchases beginning in April from €80 billion to €60 billion.
“From April 2017, the net asset purchases are intended to continue at a monthly pace of €60 billion until the end of December 2017, 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 ECB wrote in their policy statement.
The ECB admitted that if the outlook becomes “less favorable” or if financial conditions become “inconsistent with further progress towards a sustained adjustment of the path of inflation” they can increase their bond buying program regarding its size or duration.
The ECB’s main deposit facility rate will remain unchanged at 0.00%, 0.25% and -0.40%.
The euro has dropped on today’s announcement from the ECB after surpassed 1.08 for the first time since mid November ahead of today’s announcement.
The euro is currently trading at 1.0725.