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Q: The guidance seems a bit misleading re convergence to the inflation target – can you clarify? PEPP will be conducted until the coronavirus phase is over. What knowledge would allow central banks to determine that this crisis is over?
  • A: The GC will use its judgement in assessing whether the target is met, based on a forecast of what inflation is expected to be (the outlook for inflation). We are informed by experts and by observing evidence on employment, manufacturing, services, and trade i.e. the economic translation of the crisis. Hopefully, thanks to the vaccinations, the pandemic will be over sooner rather than later.

Q: Should we not expect any slowdown in PEPP anytime soon? What do you say to people that are concerned that you could be restrained in future asset purchases as a result of the capital key and issuer limits once the PEPP ends?

  • A: We have not discussed the issues of the capital key and issuer limits with respect to PEPP. On the pace of PEPP, we will continue to be guided by the outlook for inflation and maintaining favourable financing conditions.