US, WASHINGTON (ORDO NEWS) — Following the June meeting, the European Central Bank (ECB) kept key interest rates unchanged and increased the volume of the Pandemic Emergency Purchase Program (PEPP) to support the eurozone economy amid the coronavirus pandemic.
The Central Bank has increased the volume of PEPP since March by 600 billion euros to 1.35 trillion euros.
“The PEPP net purchase horizon will be extended until at least the end of June 2021. In any case, the Governing Council will conduct net purchases of PEPP assets until it decides that the coronavirus crisis phase is over,” the statement said. regulator.
Net purchases under the Asset Purchase Program (APP) will continue on a monthly basis in the amount of EUR 20 billion, together with purchases as part of an additional temporary package of EUR 120 billion until the end of the year.
The ECB reiterated that “the reinvestment of core payments from the repayment of securities acquired through APP will continue in full for a long period after the date on which the Governing Council begins to raise key interest rates for the ECB, and in any case until then, while this is necessary to maintain favorable liquidity conditions and a sufficient degree of monetary stimulus.”
The ECB left the interest rate on loans at zero, the rate on deposits at minus 0.5% per annum, the rate on margin loans at 0.25% per annum.
“The Governing Council expects the ECB’s key interest rates to remain at their current or lower levels until it sees that the inflation forecast is steadily approaching a level close enough, but below 2% within its forecast horizon, and such a convergence is consistently reflected in the dynamics of core inflation, “the central bank said in a statement.
The regulator reiterated that the Governing Council is ready, if necessary, to adjust all its instruments in order to ensure a steady movement of inflation to the target level.
Last week, ECB head Christine Lagarde said the eurozone economy is likely to contract by 8-12% in 2020 due to the effects of the pandemic.
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