ECB Policymakers Eye Temporary Bond-Buying Increase

Source: Reuters

Officials of the European Central Bank are looking at a temporary increase in the regular bond-buying program, which would still see a significant reduction in the program in March.

• Sources close to the matter said officials are looking to boost the Asset Purchase Programme (APP), but with limits on the size and the length of the commitment.
• Policymakers could possibly approve a purchase envelope that would last until the end of 2021, albeit with a caveat that it would not be fully spent.
• They could also either boost the buying program for a shorter period with a commitment of continued purchases, but would likely later be cut as the economy grows.
• Both options would still lead to lower buys in April than the combined volume of the emergency and legacy programs currently used.
• The commitment is unlikely to extend beyond 2022, driving worries for hawks who are concerned that inflation may not fall below the 2% target.
• A spokesperson for the ECB declined to comment on the matter, as the sources noted that no decision has yet to be made.