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The ECB took the first step towards policy normalization in early March. The central bank dropped its easing bias — the indication that it could increase bond purchases in both duration and size, in case the economic outlook deteriorated.
The decision gave more confidence to markets that the bank is slowly putting an end to the stimulus in the region.
ECB President Mario Draghi said at the time: “Incoming information… confirms the strong and broad-based growth momentum in the euro area economy, which is projected to expand in the near-term at a somewhat faster pace than previously expected.”
The ECB said in March that it expects real gross domestic product (GDP) to hit 2.4 percent in 2018, 1.9 percent in 2019 and 1.7 percent in 2020. For now, the quantitative easing program will continue at the pace of 30 billion euros ($ 36.70 billion) per month until September.
However, recent developments on the euro could change the bank’s policy. The currency has been on an upward trend since the start of the year, raising fears it might get too strong and reduce the attractiveness of exports from the euro area.
Draghi said in March that the ECB is monitoring the exchange rate “with regard to their possible implications for the inflation outlook.”