The accounts of the European Central Bank's (ECB) Monetary Policy Meeting dated 20 – 21 January were published on the Bank's official website.

The accounts showed that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively. Also, the Governing Council expected the key ECB interest rates to remain at their present or lower levels until it had seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence had been consistently reflected in underlying inflation dynamics.

Also, the members, who agreed that sufficient monetary stimulus was necessary to maintain favorable financing conditions throughout the pandemic, decided to maintain the financing conditions to fight against the pandemic's downward impact on the projected inflation path.

According to the accounts, member believe that the latest developments in financial markets confirmed the effectiveness of PEPP. The view was held that favourable financing conditions needed to prevail for some time in order to provide continued support to the flow of credit to all sectors of the economy and to counter possible macro-financial amplification effects. 

"As the inflation outlook was falling significantly short of the Governing Council’s aim, lower real yields would provide additional support for a faster return to price stability," the accounts reported. At the same time, the members believe that not every increase in nominal yields should be interpreted as an unwarranted tightening of financing conditions and trigger a corresponding policy response. In addition, participants stressed that nominal interest rates are not an appropriate indicator to assess whether financial conditions remain positive or not.

All members agreed with Philip R. Lane’s proposal to reconfirm the existing monetary policy measures. And members widely agreed that there was no room for complacency and that the Governing Council had to continue to stand ready and use all of its instruments, as appropriate, to ensure a robust convergence of inflation towards its aim.

In the accounts, members also argued that the decisions taken at the December meeting were appropriate for the current outlook, but that time should be given to fully see their effects, and acknowledging that the governments of Eurozone countries should also engage in continuous and ambitious fiscal policies to support economic activity that has shrunk sharply due to the pandemic.