They exert downward pressure on medium- to long-term interest rates, directly for the assets included in the programme, and indirectly for all the others through portfolio reallocations. They encourage bank credit by making it relatively more profitable than buying government securities and by reducing the cost of funding. They sustain inflation expectations and confidence.
They help to ensure that changes in the exchange rate are consistent with cyclical developments: although the euro exchange rate is not a monetary policy objective, any variations linked to the monetary conditions in the different currency areas are an important component of the transmission mechanism. The effects on financial asset prices and, looking ahead, on real asset prices can stimulate consumption.