Frankfurt (AFP)

The European Central Bank on Thursday kept its rates low while it will continue to buy debt at a high rate, as the recovery takes shape and inflation accelerates in the euro zone.

At the end of a meeting of the board of governors, the institution has, as expected, kept its main interest rate at zero, while the banks will be subject to a levy of 0.50% on the deposits that they trust the central bank instead of lending them to their customers.

Its main weapon, the private and public debt buyback program (PEPP) launched in March 2020 in the face of the outbreak of the Covid-19 pandemic, must still relate to 1.850 billion euros to be used by March 2022.

The institute will continue its debt buybacks at a rate "significantly" higher than the average during the summer after the "significantly" higher tempo in effect since March, in order to counter tensions on bond rates.

Net purchases of public and private debt have recently represented 20 billion euros per week on average, against 14 billion between January and March.

Even if an inflection will occur during the summer, the ECB is still seeking through this program to guarantee low interest rates for households and businesses in order to support the revival of activity with the hoped-for exit from the pandemic.

It was recalled Thursday that the volume of the "PEPP" program could be "recalibrated" in the event of a "negative shock" linked to the pandemic on the level of inflation which is the main objective pursued by the institution.

Conversely, the envelope may not be fully used if the ECB judges that the purchases already made are sufficient to maintain good conditions, the statement added.

The other older program, called "QE" ("Quantitative Easing" or "Quantitative Easing"), has been maintained at its current rate of 20 billion euros per month, without giving a time horizon.

Finally, banks which lend enough money to economic players will be able to borrow from the ECB at a rate up to 50 basis points lower than that of the deposit rate.

ECB President Christine Lagarde will comment on these decisions from 12.30 p.m. GMT, a year during which her remarks on the consequences to be drawn from the economic upturn and the return of inflation, translated into new economic forecasts, will be closely scrutinized.

© 2021 AFP