They will therefore adjust dynamically to changes in the inflation outlook and work in the background to keep a lid on medium to long-term interest rates. Meanwhile, the changes in the TLTRO III parameters and the two-tier system for reserve remuneration will ensure that lower market interest rates are effectively passed through to the interest rates banks charge their customers.
Concluding remarks The convergence of inflation towards the Governing Council’s aim has recently slowed and partly reversed. The comprehensive package of measures decided last week will help to support the convergence of inflation to levels that are below, but close to, 2 percent in a sustained manner.