By Balazs Koranyi FRANKFURT (Reuters) – Determined to keep a low profile on the Greek crisis, the European Central Bank will focus on prospects of improved growth at its meeting on Thursday and reveal some details, but not all, of a program to purchase sovereign bonds of more than one billion euros. Meeting in Cyprus, the ECB will keep interest rates likely to rise its growth forecasts to reflect a series of unexpected positive data. Moreover, it could also reduce inflation projections incorporating the full effect of the sharp drop in oil prices, which would support their arguments to buy bonds for 60,000 million euros a month to stimulate prices. The central bank has a long way to go to convince the markets. Only half of economists polled by Reuters believe that buying bonds help inflation to rise towards the target at around 2 percent and half think that bond purchases will be extended beyond September 2016. The ECB has said that printing money will last “at least” until September 2016 and until a “sustained fit” occurs in the path of inflation. The markets will be watching how it will work monetary easing, when you begin shopping, if you apply to debt with negative returns and how purchases are distributed in the yield curve. The anticipation of buying program scale debt has made borrowing costs in the euro zone have dropped so much that Spain can borrow money for 10 years at an interest rate of 1.3 percent and that investors actually pay for the privilege of lending money to Germany to five years. The debt yields in Italy, Spain and Portugal fell to record lows this week . Continued …
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