The European Central Bank (ECB) will cut back its scheme designed to boost the economies of the eurozone.
From January of next year, it will reduce the amount of assets it buys every month to €30bn from the current level of €60bn.
The programme, which aimed to fend off the threat of eurozone deflation and help boost employment, could finish by the end of next year.
Inflation is likely to be below the 2% ECB target for the next few years.
The ECB said the reduced programme would run to the end of September 2018, “or beyond, if necessary”.
If economic conditions become less favourable, or if no progress is likely to be made towards the ECB’s inflation target, it could increase bond-buying again, it said.
“Our programme is flexible enough that we can adjust its size smoothly,” ECB President Mario Draghi told a press conference.
“Today’s monetary policy decisions were taken to preserve the very favourable financing conditions that are still needed for a sustained return of inflation rates towards [target],” Mr Draghi said.
He said the ECB will reinvest the principal investment from maturing bonds for an extended period after the end of the bond-buying programme, which could run to billions of euros per month.
The decision to cut quantitative easing measures was not unanimous among ECB policymakers, and a large majority favoured keeping monetary stimulus open-ended, he said.
Mr Draghi has been signalling for months that the bond-buying scheme will be reduced.
“Mario Draghi’s main goal for months now has been to gently steer markets into thinking that this tapering would come today. He’s done that so markets take the announcement in their stride, which they will,” said Patrick O’Donnell, Aberdeen Standard Investments senior investment manager.
The ECB kept the key interest rate for the countries that use the euro unchanged at 0%, and its deposit rate at -0.4%.
The central bank charges banks and other financial institutions to deposit excess money with it to encourage banks to lend.