ECB to reduce monthly bond purchases in 2018

• October 26, 2017
• realestatelife
• Announcements, Business & Markets, Real Estate, Real Estate Finance

The European Central Bank on Thursday announced that it would extend its bond-buying program into 2018, but cut the pace of monthly purchases in half beginning in January in a long-awaited move.
In an announcement following a meeting of the ECB’s Governing Council, the bank said it would continue the bond-buying program, which had been scheduled to expire in December, through the end of September.

Beginning in January, monthly purchases will be reduced to €30 billion ($35.3 billion).

The ECB had been widely expected to extend the program, but many questions surrounded the duration and scope of purchases into 2018. The ECB, as expected, left interest rates unchanged and reiterated that it expected them to remain at present levels for an “extended period” and beyond the eventual end of its asset-buying program.

The ECB also noted it could further extend the asset buying program, increase its size, or both if the outlook for inflation in the eurozone deteriorated. It also said it intended to keep reinvesting principal payments from the securities it has purchased well past the end of its net bond buying program.

The euro was down 0.5% versus the dollar following the announcement.
ECB President Mario Draghi is expected to shed more light on policy makers’ thinking and expectations when he holds his news conference in Frankfurt.