Euro Area Interest Rate

The European Central Bank revised its forward guidance on interest rates during its July meeting, saying it expects interest rates to remain at their present or lower levels until it sees inflation reaching 2 percent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realized progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilizing at 2 percent over the medium term. Also, the central bank retained the pace of asset purchases programme at €20 billion per month, reiterating that the PEPP envelope can be recalibrated if required, while confirming it will be reinvesting maturing PEPP bonds at least through the end-2023.