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    Published on Thursday, July 8, 2021

    ECB WATCH | ECB Strategy Review: 2% and mindful of climate change

    Summary

    The strategy review has been relatively moderate, introducing a symmetric and clearer (2%) inflatio target, and adopting as permanent the current toolkit. The change has been less ambitious than the one by the Fed. On climate change, the ECB is clearly more committed to specific action, but depends on other institutions

    Key points

    • Key points:
    • In its new strategy review, the ECB adopts a symmetric 2% target, as expected. This is a moderate but welcome change
    • Interest rates will remain the primary tool, while “non-standard” measures will be part of the monetary policy toolkit, though no details are provided
    • The ECB firmly commits to climate change in the conduct of its monetary policy

    Geographies

    Topics

    Authors

    Sonsoles Castillo BBVA Research - Chief Economist for Financial and Economic Analysis
    Sumedh Deorukhkar BBVA Research - Senior Economist
    Miguel Jiménez BBVA Research - Lead Economist
    María Martínez BBVA Research - Principal Economist
    Cristina Varela BBVA Research - Principal Economist

    Documents and files

    Report (PDF)

    ECB-Watch_StrategyReview_0721.pdf

    English - July 8, 2021

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