Reduction in ECB Asset Purchase Program to Support Issuers with Better Climate Performance

Up to the end of June 2023, decline will be an average of €15 billion every month, and its rate after that will be decided over time. Reduction in Asset Purchase Program will be assessed by Governing Council for preserving market functionality and for maintaining firm control over money market conditions.

The portfolio of the ECB’s asset purchase programme (APP) will start to fall at the beginning of March 2023 at a gradual and predictable rate. Eurosystem won’t reinvest all of the principal payments from maturing assets.

Up to the end of June 2023, decline will be an average of €15 billion every month, and its rate after that will be decided over time. Reduction in Asset Purchase Program will be assessed by Governing Council for preserving market functionality and for maintaining firm control over money market conditions.

 Modalities for reducing Eurosystem’s APP has been determined by the ECB Governing Council.

The Eurosystem will continue to use its current smooth reinvestment strategy throughout the time of partial reinvestment. The APP’s monthly redemptions will surpass the agreed-upon average run-off speed of €15 billion per month between March and June 2023. The Eurosystem will continue to operate under the APP over this time frame with partial reinvestments exceeding €15 billion per month.

During the time of partial reinvestment, the ECB Governing Council has decided to slant its corporate bond purchases even further in favour of issuers with higher environmental performance. This strategy will promote the progressive decarbonization of the Eurosystem’s corporate bond holdings, in line with the aims of the Paris Agreement, without compromising the ECB’s price stability objective or the Governing Council’s climate action plan.

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