The European Central Bank (ECB) is keeping interest rates the same as expected, the central bank announced on Thursday. However, the ECB is expanding its buy-back program to stimulate the eurozone economy, which is hit by the second corona wave.
The European Central Bank (ECB) is keeping interest rates the same as expected, the central bank announced on Thursday. However, the ECB is expanding its buy-back program to stimulate the eurozone economy, which is hit by the second corona wave.
The regulator is allocating an extra 500 billion euros for the purchase program. This brings the total size of the buy-back program to 1,850 billion euros. The program will also be extended for another nine months until March 2022.
The ECB says it will continue to make new purchases until the corona crisis is over. The money already spent will be put back into the economy until at least the end of 2023 when bonds are paid off.
The ECB is also extending a program whereby banks can borrow money from the central bank at very favorable rates. Banks can also borrow more money under those conditions.
The measures come as no surprise. Earlier this autumn, President Christine Lagarde hinted at the possibility that the ECB would come up with additional measures this month to keep the economy up to standard.
Nothing will change in terms of interest rates. The ECB expects interest rates to remain at the same low level until it is clear that expected inflation will remain slightly below 2 percent.
