FRANKFURT (Reuters) - The European Central Bank may provide next month a more elaborate guidance on the time frame for reinvesting cash from maturing bonds, Peter Praet, the bank’s chief economist said on Monday.
The ECB plans to end its bond purchases next month and reinvestments will then become its key tool to influence market prices, raising questions about just how long such buys will go on.
The ECB currently guides markets for reinvestments for an “extended period” and markets interpret this as two to three years.
“At the following meetings of the Governing Council, we have to explain a little bit what we mean by an extended period of time,” Praet told a conference.
“I cannot tell you about the December meeting but I think you’re right to expect the ECB to clarify what we mean that we expect to reinvest for an extended period of time,” Praet said. “How are we going to clarify this, let’s wait for December.”
The ECB next meets on Dec. 13 when it is expected to formally end bond purchases, a move that is largely a formality since it was first flagged in June.
Reporting by Balazs Koranyi; Editing by Matthew Mpoke Bigg
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