Frankfurt: The European Central Bank (ECB) ruled out further interest rate cuts in a sign that it’s moving closer to an exit from its stimulus programme.

The governing council, meeting in Tallinn on Thursday, dropped its guidance that rates might fall further, saying only that it now expects borrowing costs to stay at present levels for an extended period. Policymakers reiterated their pledge to increase the size or duration of their bond-buying programme if the economy deteriorates.

While the improving economy has sparked a debate about policy, it wasn’t a certainty how far the ECB would change its guidance at this meeting. President Mario Draghi and his closest allies had sought to talk down expectations for any major shift, arguing the ECB must be extremely cautious in communicating any exit from stimulus amid a lack of convincing inflationary pressure.

Even so, the statement marks only a small step. The deposit rate was kept unchanged at minus 0.4% and the main refinancing rate at zero, and officials still intend to buy €60 billion ($67 billion) of debt a month until at least the end of the year.

The euro fluctuated after the decision and was down 0.2% at $1.1233 at 1:49pm Frankfurt time.

The focus now turns to Draghi’s press conference at 3:30pm local time in the Estonian capital. The ECB chief is expected to say that the risks to the euro area’s recovery are now balanced, and investors will be listening for any signal on when a decision to unwind stimulus might be taken. In a Bloomberg survey, economists predicted that announcement will most likely come by the governing council’s September meeting.

Updated forecasts to be announced by Draghi will show a stronger growth outlook but a weaker inflation picture across the projection horizon, according to euro-area officials familiar with the matter. With price growth estimated at roughly around 1.5% through 2019, compared with a goal of just under 2%, policymakers may hold off on more significant changes until later this year.

Data on Thursday showed euro-area gross domestic product rose 0.6% in the first quarter, stronger than initially estimated. Bloomberg