Frankfurt (Germany), Nov 23 (EFE). - The European Central Bank (ECB) reduced the monetary stimulus in the euro area by half at the end of October because it relies more on inflation rise to its target of a rate close to 2%.
In the minutes of its last monetary policy meeting, published today, the ECB said that "a large majority of members (of the Board of Government) supported "the proposal to reduce from January the purchases of debt up to 30,000 million euros for nine more months and leave an open end to the expansion program quantitative.
"The announcement of an end date could induce market participants to adjust prices in advance, which could lead to an undesired toughening of financial conditions ", according to the minutes.
The Governing Council also considered it important to continue showing the willingness and ability to change the program of debt purchase if necessary if the situation worsens.
The ECB decided on October 26 to reduce the monetary stimulus in the euro area by half, until the end of September 2018, and kept interest rates at the historical low of 0%.
But the door was left open to make changes in purchases of public and private debt in the area of the euro if the situation worsens.
It also opted to continue charging banks 0.4% for the excess of their one-day reserves to lend to businesses and households and they will lend everything they want until 2019.
The ECB made these decisions because financial conditions are stable, volatility on exchange rates has been reduced, economic growth and more confident that inflation will rise.
A few members were in favor of announcing a clear end date for debt purchases because it is expected that inflation rises, economic growth is stronger than expected, risks have decreased and financial conditions for the real economy are favorable.
A The Governing Council member even considered that an open end was not warranted unless there were risks that deflationary pressures would re-emerge and argued that the The relationship between costs and benefits of debt purchases became increasingly unfavorable.
Although it was recognized that it was necessary to maintain the monetary expansion and that it was important that the program will end in an orderly manner.