FRANKFURT – Christine Lagarde (ECB President) said that the European Central Bank does not intend to raise interest rates before it has finished bond buying for the quarter.

Lagarde said that an adjustment to key ECB interest rate will happen sometime after our net purchase under the APP, and would be gradual.

“The Governing council’s forward guidance, as well as its commitment to stabilizing inflation at 2% in the medium-term, will continue to determine the path of key ECB interest rate.”

According to the bank, it announced on Thursday that asset purchases will be stopped in the third quarter. It also plans to accelerate its exit from extraordinary stimuli in surprise moves, because of rising inflation and concerns over Russia’s attack in Ukraine.

Markets now price in interest rate rises of around 43 basispoints, up from 30 basis points forecasted before the meeting.

Money markets were pricing in a 30-basis point rise to the ECB’s December deposit rate. This would bring it down to minus 0.2%, compared to the current minus 0.5%.

Since Russia’s invasion of Ukraine on February 24, investors have reduced their expectations for rate rises. Expect slowing growth from the conflict at the eastern border of the eurozone to make the ECB less cautious in tightening their policy.

Lagarde indicated that “The Governing Board expects the key ECB rate levels to stay at their current level until it perceives inflation reaching 2% much ahead of its projection horizon – and durably for most of the projection horizon.”

President of the ECB had opened up rates hikes to the public at a news conference on February 2, by not repeating her long-held belief that such a move is “very unlikely” in this year’s economy.

One of several measures to boost the then slowing price growth in 19 countries, including the ECB’s drop in deposit rates in 2014 was to lower their rate.

Banks will be charged for the use of idle cash by the ECB at a negative rate.