FRANKFURT: The European Central Bank (ECB) will unveil the details of the bond purchase programme it is embarking on later this month at its next meeting, but is unlikely to announce any new policy measures, analysts said.
Greece is also likely to be at the top of the agenda, following the recent eurozone deal to extend aid to the debt-wracked country, the ECB watchers said.
The ECB’s decision-making governing council will hold its meeting on Thursday in Nicosia, Cyprus, instead of the usual venue of Frankfurt.
But after revealing its plans for so-called quantitative easing (QE) in January, the meeting will focus on fleshing out the details of that programme, rather than announcing any new measures, analysts said.
“The ECB is unlikely to announce any new policies as it prepares to implement the quantitative easing programme,” said Jennifer McKeown of Capital Economics.
At its first meeting of the year last month, ECB chief Mario Draghi announced a programme to buy 60 billion euros (US$68 billion) of private and public bonds each month starting in March until at least September 2016 in a bid to ward off deflation in the euro area.
“At the first meeting after its QE decision – and only a few days ahead of the actual start of government bond purchases – we believe the ECB will adopt a wait and see policy,” said Commerzbank economist Michael Schubert.
At his post-meeting news conference, Draghi “is likely to stress that the QE programme is ‘open-ended’. By doing so, he will keep alive market speculation of further measures,” Schubert said.
“However, he is also likely to emphasise that the purchases starting in March will first have to show their effect.”
The ECB will also publish Thursday its latest updated growth and inflation forecasts for the 19 countries that share the euro.
ECB vice president Vitor Constancio has already signalled that the growth forecasts would likely be revised upwards, as the eurozone economy benefits from the cheaper euro, falling energy prices and the positive effects of economic reforms, said UniCredit analyst Martina von Terzi.
By contrast, the 2015 inflation projection was likely to be slashed once again, owing to much lower oil price assumptions, said Deka Bank economist Ulrich Kater.
BayernLB economist Johannes Mayr said the projections “will for the first time take into account the anticipated effects of the QE programme and therefore might provide a clue about the likelihood of additional bond purchases beyond 2016”. — AFP