The graph shows the impact of the public sector purchase programme (PSPP) announced by the Governing Council of the ECB in January 2015 on 10-year sovereign bond yields. The programme initially contributed to lowering long-term interest rates by about 60 bp. In 2019, the impact of the programme on long-term sovereign yields in the euro area amounts to around 130 bp, an effect essentially associated with the stock of sovereign debt securities held by the Eurosystem. It can thus be concluded that the PSPP has contributed to a substantial degree of monetary accommodation, helping to drive the rate of inflation towards the price stability objective.

For more details, see Box 1 “The impact of the public sector purchase programme on euro area long-term yields”, published in the Economic Bulletin of Banco de Portugal in June 2019.

Prepared by Nuno Alves and António Antunes. The analyses, opinions and findings expressed above represent the views of the authors and not necessarily those of Banco de Portugal or the Eurosystem.

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