US, WASHINGTON (ORDO NEWS) — The European Central Bank at an emergency meeting on Wednesday announced a new program to buy bonds worth 750 billion euros in an attempt to contain the effects of the coronavirus epidemic on the eurozone economy.
The volume of planned purchases of ECB bonds this year will increase to 1.1 trillion euros. Recent agreed purchases account for 6% of eurozone GDP.
“Extraordinary times require extraordinary actions,” said ECB chief Christine Lagarde. – There are no restrictions for our obligations with respect to the euro. We are committed to using the full potential of our tools within our mandate.”
Bond purchases will continue until the “crisis phase” of the epidemic is over, for the first time commercial papers of non-financial organizations will be included in the number of assets falling under the program, the ECB said.
Also, Greek debt was included in purchases for the first time, which the ECB had not bought before because of the low credit rating.
The ECB said it was ready to increase the volume and duration of purchases if necessary.
At the same time, the regulator left the deposit rate unchanged at minus 0.5%, as at a regular meeting last Thursday – this again suggests that officials may believe that another decrease in the cost of borrowing will do more harm. than good.
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