FRANKFURT, Oct.28 (Reuters) – The European Central Bank (ECB) left monetary policy unchanged on Thursday, as expected, postponing crucial decisions on the course of its bond purchases and the upcoming normalization of its strategy until December .

The institution reaffirmed its intention to maintain for the moment its purchases of bonds on the markets, which aim to prevent the increase in the cost of credit, and repeated its promise to keep rates low for several more years, a commitment which in recent months has raised doubts among some investors in the face of accelerating inflation.

The ECB has so far assured that this price surge should remain temporary, stressing that core inflation remains contained and well below its 2% target, which it believes justifies maintaining an accommodative policy.

But the inflation expectations of markets and consumers are on the rise and more and more investors are anticipating a rate hike before the end of 2022.

At the press conference scheduled for 12:30 GMT, ECB President Christine Lagarde is expected to reaffirm that the institution is in no rush to tighten its policy further even if several other major central banks have embarked on this path or are preparing to do so in the face of persistent inflationary pressures.

The Bank of Canada announced on Wednesday the end of its quantitative easing (QE) program and hinted that it could raise its key rate earlier than expected so far and the US Federal Reserve should specify the timetable next Wednesday. and the terms of its “tapering” strategy, the gradual reduction in its purchases of Treasury bills.

The ECB can rely on economic indicators which show that soaring prices for energy and other commodities, tensions on supply chains and labor shortages are all the same. at the moment no upward impact on wages.

Its refinancing rate therefore remains at zero for the time being, the deposit facility rate at -0.5% and the marginal lending rate at 0.25%, as expected by all economists and analysts polled by Reuters before. the meeting of the Board of Governors.

The ECB also confirms that its purchases of securities within the framework of the emergency purchasing program in the face of the pandemic, endowed with 1.850 billion euros and scheduled until next March, may continue at a “slightly higher rate”. low “than in the second and third trimesters.

The euro and bond yields showed no immediate reaction to these largely anticipated decisions. The single currency traded at $ 1.1593 at 12:05 GMT and the ten-year German Bund yield was -0.154%.

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