Talk of phasing out ECB emergency bond buys is premature, says Lagarde

[FRANKFURT] The European Central Bank did not on Thursday discuss any phasing out of the huge programme of bond purchases it is conducting to help offset the economic impact of the coronavirus pandemic, ECB President Christine Lagarde said.

The ECB has increased the weekly size of the Pandemic Emergency Purchase Programme (PEPP) by a quarter since its March meeting to keep credit cheap for euro zone governments, companies and households.

During Thursday's policy meeting, the bank's governing council "did not discuss any phasing out of PEPP because it is simply premature," Ms Lagarde told the post-meeting news conference.

Any change to the pace of the programme is "data-dependent" and not linked to a particular time frame, she added.

Some analysts had been expecting the ECB to buy more than the 18.2 billion euros (S$29 billion) in bonds that it has scooped up on average over the past five weeks and have begun to doubt its commitment to a "significantly higher pace" of purchases.

That commitment remained fully in place, Ms Lagarde said.

Dutch central bank governor Klaas Knot urged a reduction in the pace of bond purchases from the third quarter in a Reuters interview earlier this month, a call later echoed by his Austrian counterpart Robert Holzmann.

But Ms Lagarde responded in a Reuters interview last week that it was too early to remove the "two crutches" of monetary and fiscal stimulus supporting the ailing euro zone economy.

REUTERS