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February 2, 2023

The Governing Council will continue to maintain a steady pace of significant increases in interest rates and keep them at sufficiently restrictive levels to ensure a timely return of inflation to the 2% medium-term objective. Accordingly, the Governing Council today decided to increase the three key ECB interest rates by 50 basis points and expects to increase them further. Given the underlying inflationary pressures, the Governing Council intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March, and will then assess the path forward for its monetary policy. Keeping interest rates at restrictive levels will reduce inflation over time by reducing demand, as well as protect against the risk of a continued shift in inflation expectations. In any case, the Governing Council’s future policy rate decisions will continue to be data-driven and will be monitored on a meeting-by-meeting basis.

The Governing Council today also decided on ways to reduce holdings of Eurosystem securities under the asset purchase program (APP). As reported in December, APP’s portfolio will be reduced by an average of €15 billion per month from the beginning of March to the end of June 2023, with further rates of portfolio reduction to be determined over time. Partial reinvestments will be made generally in accordance with current practice. Specifically, the remaining reinvestment amounts will be distributed proportionately to the share of repayments in each constituent program of the APP, and the share of buybacks of each jurisdiction and national and supranational issuers under the Public Sector Purchase Program (PSPP). In the case of Eurosystem corporate bond purchases, remaining reinvestments will be directed more strongly towards issuers with better climate performance. Without prejudice to the ECB’s price stability objective, this approach will support the gradual decarbonisation of the Eurosystem’s corporate bond holdings in line with the objectives of the Paris Agreement.

The detailed methods for reducing APP reserves are described in a separate press release to be issued at 15:45 CET.

ECB key interest rates

The Governing Council has decided to increase the three main interest rates of the ECB by 50 basis points. Accordingly, from February 8, 2023, the main refinancing operations rate and the marginal lending and deposit lending rates will be increased to 3.00%, 3.25% and 2.50%, respectively.

Asset Purchase Program (APP) and Pandemic Emergency Purchase Program (PEPP)

The Board of Directors intends to continue to fully reinvest principal payments from maturing securities purchased under the APP through the end of February 2023. In the future, the APP portfolio will decline at a measured and predictable pace, as the Eurosystem will not reinvest it all. principal payments from redeemable securities; The decline will average €15 billion per month until the end of June 2023, and its further pace will be determined over time.

As for PEPP, the Governing Council intends to reinvest principal payments from maturing securities purchased under the scheme until at least the end of 2024. In any case, future transfers of the PEPP portfolio will manage to avoid interference. appropriate monetary policy stance.

The Governing Council will continue to exercise flexibility in reinvesting pending repayments in the PEPP portfolio to address risks to the transmission mechanism of monetary policy related to the pandemic.

Refinancing operations

As banks repay loans under targeted long-term refinancing operations, the Governing Council will regularly assess how targeted lending operations contribute to its monetary policy stance.


The Governing Council is ready to adjust all its tools within its mandate to ensure that inflation returns to its 2% medium-term target. The transmission protection tool is available to counter unwarranted, erratic market dynamics that pose a serious threat to the transmission of monetary policy in all euro area countries, thus allowing the Governing Council to fulfill its price stability mandate more effectively.

The ECB President will comment on the reasoning behind these decisions at a press conference starting at 14:45 CET today.


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