The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a
timely manner. Based on its current assessment, the Governing Council considers that the key ECB
interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial
contribution to this goal. The Governing Council’s future decisions will ensure that its policy rates will
be set at sufficiently restrictive levels for as long as necessary.
The Governing Council will continue to follow a data-dependent approach to determining the
appropriate level and duration of restriction. In particular, the Governing Council’s interest rate
decisions will be based on its assessment of the inflation outlook in light of the incoming economic and
financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
Key ECB interest rates
The interest rate on the main refinancing operations and the interest rates on the marginal lending
facility and the deposit facility will remain unchanged at 4.50%, 4.75% and 4.00% respectively.
Asset purchase programme (APP) and pandemic emergency
purchase programme (PEPP)
The APP portfolio is declining at a measured and predictable pace, as the Eurosystem no longer
reinvests the principal payments from maturing securities.
The Governing Council intends to continue to reinvest, in full, the principal payments from maturing
securities purchased under the PEPP during the first half of 2024. Over the second half of the year, it
intends to reduce the PEPP portfolio by €7.5 billion per month on average. The Governing Council
intends to discontinue reinvestments under the PEPP at the end of 2024.
The Governing Council 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.
Refinancing operations
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.
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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.
The President of the ECB will comment on the considerations underlying these decisions at a press
conference starting at 14:45 CET today.