The ECB said on Thursday that the total envelope need not be used in full if "favorable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP", but added that the envelope can also be recalibrated to maintain favorable financing conditions and counter pandemic shock.
The ECB said it would maintain the eurozone's headline interest rate at 0% and the deposit rate at -0.5%.
The recent pause in the euro appreciation will be welcome news for the European Central Bank but EUR/USD is still largely sitting in a comfortable range above 1.20 for the time being. The ECB's decision not to adjust its key programmes was largely expected because it added a major dose of stimulus only last month, at its December 10 meeting. Germany, the currency bloc's largest economy, decided this week to extend its strict lockdown measures until mid-February.
The central bank also left its programme of unconventional monetary policy unchanged.
European Central Bank president Christine Lagarde said the eurozone economy probably contracted at the end of a year ago, meaning that the bloc now looks headed for a double-dip recession. She reeled off a list of "positives" including the approval of the European Union's recovery fund, a pickup in manufacturing, the removal of political uncertainty in the USA and the rollout of vaccines.
The ECB's measures are aimed at keeping credit flowing in the eurozone in a bid to boost growth and inflation.
The former French finance minister also reiterated her plea for European governments to support the ECB's efforts through fiscal policy.
Jai Malhi, strategist at JPMorgan Asset Management, said: "The ECB held policy steady today, hoping that its measures implemented in the December meeting alongside the European Union recovery fund rollout, will be enough to support the economy until the outlook brightens".
Uncomfortably low inflation is set to remain a thorn in the ECB's side for years to come, however, even if surging oil demand helps put upward pressure on prices in 2021.
"We had anticipated the continuation and the lockdown measures that are now in place. and that leads us to conclude that our own forecast for 2021 is still broadly valid at this time", she said, while cautioning that short-term risk was "tilted to the downside, no question about it". The emergence of more contagious virus variants in Britain and South Africa has fuelled fears of a possible surge in outbreaks, at a time when many countries are already struggling to bring down Covid-19 cases. The recent strength of the euro could make that task even harder.
"The central bank is resting on its laurels following the boost to stimulus last month, with the statement broadly reiterating the steps it took last month", said Claus Vistesen, Pantheon Macroeconomics' chief eurozone economist.
"This is a slight hawkish tilt in the communication, and also one which could become a target for markets", Vistesen said.
Still, Lagarde said last week that some uncertainties relating to Brexit and the USA elections have cleared, and that the European Central Bank already assumed measures to limit the spread of the virus would be in place through the first quarter.