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Monetary policy glossary

pension fund

A provision or similar funds set aside by non-financial corporations to pay for their employees' pensions.

post-fixed coupon

A coupon on floating rate instruments which is determined on the basis of the values taken by the reference index at a certain date (or dates) during the coupon accrual period.

PPP

See purchasing power parity (PPP)

pre-fixed coupon

A coupon on floating rate instruments which is determined on the basis of the values taken by the reference index at a certain date (or dates) before the start of the coupon accrual period.

price stability

The primary objective of the Eurosystem. The Governing Council considers that price stability is best maintained by aiming for 2% inflation over the medium term. The target is symmetric: negative and positive deviations from the target are considered equally undesirable.

projections

See Eurosystem staff projections

purchasing power parity (PPP)

The rate used for the conversion of one currency into another that equalises the purchasing power of the two currencies by eliminating the differences in the price levels prevailing in the countries concerned. In their simplest form, PPPs show the ratio of the prices in national currency of the same good or service in different countries.