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ECB restates commitment to €80bn quantitative easing programme

Jake Cordell
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Mario Draghi
Mario Draghi believes the ECB's policies are starting to have an impact (Source: Getty)

The European Central Bank (ECB) has reiterated its commitment to its quantitative easing programme following rumours the central bank was preparing to taper its purchases of government and corporate bonds.

In the minutes from its September meeting, released today, the ECB said "there should be no doubt about the [ECB's] determination to execute its asset purchases... and to adopt further measures, if needed."

The euro was rocked earlier this week on rumours the minutes would reveal the ECB's governing council had discussed plans over how to start reining in the €80bn (£71bn) a month programme. The ECB had been expected to announce details of an extension to the programme, which is currently due to end next year.

The ECB reiterated it was ready to continue the scheme "until the end of March 2017, or beyond, if necessary, and in any case until the governing council saw a sustained adjustment in the path of inflation".

Read more: Corporate debt gets even cheaper as ECB launches bond-buying programme

It continued: "As regards implementation, there has to be no doubt about the governing council's ability to act if needed."

Concerns have been raised about a potential shortage of bonds the ECB will be able to buy given the vast scope of the programme. Only bonds which have a higher interest rate than the ECB's minus 0.4 per cent are eligible to be purchased by the bank, which said: "The present constellation of interest rates was posing increasing challenges to implementation in the future."

Nevertheless, the ECB said it could change the "parameters" if needed in order to ensure "effectiveness from a monetary policy perspective."

The ECB is widely expected to announce further details of how it proposes to either extend - or end - the scheme at the meeting of the governing council on 8 December.

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