PARIS (Reuters) – A resurgence of COVID cases and a jump in inflation do not at this point warrant a change in ECB plans to wind down emergency bond purchases in March, ECB policymaker Francois Villeroy de Galhau said on Monday.
With the European Central Bank’s 1.85-trillion-euro Pandemic Emergency Purchase Programme (PEPP) due to expire in March, the ECB is due to decide in December on the its future and another one in place since 2015.
“I don’t think current developments change this assessment. From today’s perspective, we should end PEPP net purchases in March 2022,” Villeroy said in an interview with German newspaper Boersen Zeitung.
Since financial markets were largely anticipating its end in March, there was little reason to fear disruptive “cliff effects” when it does, he said.
While a jump in COVID cases in some euro zone countries is clouding the economic outlook, a surge in inflation this year has prompted warnings from ECB hawks to not keep monetary policy too loose too long.
Villeroy urged a “patient and vigilant” response at the ECB because the euro zone economy was not at risk of falling back into recession and because the inflation “hump” was temporary and caused by business bottlenecks.
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