ECB Monetary Policy Decisions: Q4 2020 Recalibration
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ECB Governing Council Meeting: October 29, 2020
Key Economic Context
- A fall in oil prices caused a fall in inflation.
- The pandemic led to an economic crisis, necessitating stimulus from the ECB to support the economy.
- Inflation fell from 0.7% in March to 0.4% in April.
Policy Decisions
- The interest rates on the Main Refinancing Operations (MRO) and the interest rates on the marginal lending and deposit facilities will remain unchanged at 0.00%, 0.25%, and -0.50% respectively.
- The ECB expects interest rates to remain unchanged or to be lowered until the inflation outlook converges to a level close to 2%.
- The ECB will continue its **Pandemic Emergency Purchase Program (PEPP)**—€1,350 billion—until June 2021. Its objective is to offset the harm