ECB extends QE - but scales back the programme

It will keep buying bonds, but at a lower rate...

ECB extends QE - but scales back the programme

Picture by: Michael Probst / AP/Press Association Images

The European Central Bank (ECB) will extend its quantitative easing scheme in 2017 - but it will spend less on bonds every month.

The ECB will continue to buy these assets until the end of 2017 - and beyond if it is deemed to be necessary. But it will pump €60bn in to the market every month - that's down from the current rate of €80bn until March of next year.

This decision could please both states who want the programme to be wound down - and those who want it extended.

Ahead of the meeting the bank was expected to announce a six month extension of the current programme - with no changes.

Addressing the media after the meeting, ECB President Mario Draghi said that this will ensure that financial conditions in the bloc will remain "favourable."

He described the eurozone's recovery as "moderate but firming" - and said the ECB is committed to using all tools at its disposal to provide stimulation.

Mr Draghi added that the ECB is altering the rules of its QE programme - to allow it to buy ultra-safe government bonds which cost more than the bonds that it is currently buying.

The ECB has bought up bonds worth €1.4tn since March 2015.