The ECB maintains its monetary course amid the uncertainties of the pandemic

The European Central Bank (ECB), as expected, confirmed Thursday its monetary support measures for the economy while the expected rebound in activity is delayed, which should postpone the debate on the duration of massive debt purchases.

After a meeting of the Governing Council, the guardians of the euro opted for the status quo on their panoply of anti-crisis tools.

The main weapon of the ECB, the emergency purchase program in the face of the pandemic (PEPP) launched a year ago to maintain favorable financing conditions, must still relate to 1.850 billion euros to be spent here March 2022.

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Interest rates were kept at their all-time low. Part of the liquidity deposited with the ECB instead of being distributed via loans will remain taxed at -0.5%, as since September 2019. The key rate used for short-term bank refinancing has been kept at zero. , a level at which it has stood since 2016. Decided in March in response to pressure on bond rates, the “

significant

”

increase

in

the pace of public and private debt buybacks is set to continue.

"

The Governing Council expects PEPP purchases to continue during the current quarter at a significantly higher rate than during the first months of the year,

" the statement said.

This intervention had contributed to the easing of the bond market after the excitement sparked at the beginning of the year by fears of an overheating of the US economy.

Since March, the weekly amount of net asset purchases under the PEPP has been around € 17 billion on average, compared to € 12 billion in January and February.

Pace of purchases

All attention is now focused on "the indications that the ECB could provide as to the duration of massive purchases" of securities, said Eric Dor, director of economic studies at the IESEG School of Management.

Analysts expect a slowdown later this year.

To what extent?

Investors will watch for any clues from ECB President Christine Lagarde during her press conference from 2:30 p.m. (12:30 p.m. GMT).

"

Silence is golden,

" notes Carsten Brzeski, of the bank ING, however, who considers it unlikely that Ms. Lagarde reveals her game. He expects the big money to postpone sensitive topics to the next meeting in June .

The ECB is pursuing a very expansive policy intended to support loans to households and businesses.

Ms. Lagarde had assured at the end of March that it would pass "

a certain time

" before the institution tightens its monetary policy.

Third wave

The ECB had also swept aside, at its previous meeting, the risks of a price slippage, judging that the rebound in inflation in the euro zone was linked to temporary factors.

The rise in prices has accelerated since January to reach 1.3% in March, in particular due to the recovery in the energy market. The ECB expects inflation close to 2%, its main target, to remain elusive for a while. Sustainably higher prices usually force central banks to tighten the monetary screw. The economic context also remains fragile, allowing the Frankfurt institution to maintain its accommodative policy.

The third wave of Covid is slowing the recovery and health constraints are only slowly easing, pending the effect of vaccination campaigns.

Germany is even preparing to tighten its restrictions.

Unsurprisingly, Ms. Lagarde is expected to reiterate on Thursday her call for the rapid implementation of the European recovery plan, deemed essential for the recovery.

The 27 member states are in the laborious phase of ratification.

To read also: Christine Lagarde does not foresee a change of monetary course before "a certain time"

In this regard, the German Constitutional Court on Wednesday removed a sizeable uncertainty by rejecting a summary appeal aimed at blocking this process and in particular its unprecedented and controversial mechanism of common debt.