ECB slows pandemic stimulus as eurozone bounces back

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The European Central Bank's 25-member governing council said it would slow the pace of its massive monthly bond purchases, as economic activity bounces back and inflation surges higher
The European Central Bank took a small step towards scaling back pandemic-era stimulus Thursday, but sought to reassure markets of its ongoing support as the fast-spreading Delta variant clouds the eurozone recovery.

The ECB's 25-member governing council said it would slow the pace of its massive monthly bond purchases, as economic activity bounces back and inflation surges higher.

The 1.85-trillion-euro ($2.2 trillion) pandemic emergency bond-purchasing programme (PEPP) is the ECB's main tool to cushion the impact of the coronavirus crisis and is aimed at keeping credit cheap in the eurozone.

"The governing council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the PEPP than in the previous two quarters," the Frankfurt institution said in a statement.

The ECB did not, however, change the size of the scheme nor its end-date, set for March 2022.

The ECB stressed its "flexibility" in supporting the euro area economy and said it stood "ready to adjust all of its instruments, as appropriate".

Attention now shifts to ECB president Christine Lagarde's 1230 GMT press conference, who like central bankers everywhere faces the tricky task of deciding when and how to remove stimulus without jeopardising the recovery.

Analysts expect Lagarde will try to stress that the slower PEPP pace does not…
AFP
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