ECB does not change key interest rates, may introduce new QE packages
ECB decided to maintain the base interest rate at 0%, with lending and deposit interest rates of 0.25% and negative 0.5%, respectively.
|ECB headquarters. (Photo: EPA)|
On October 29, the European Central Bank (ECB) decided not to change key interest rates and “voiced” the possibility of increasing the willingness to increase stimulus measures in response to the epidemic of respiratory inflammation. issue COVID-19 in the meeting next December.
According to the press release after the ECB monetary policy meeting, this financial institution still maintains the base interest rate at 0%, with the lending and deposit interest rates at 0.25% respectively. and negative 0.5%.
The ECB’s statement stated: “In the context of clear and negative current risks, the Executive Council will carefully evaluate upcoming information, including the COVID-19 epidemic, Vaccine outlook and foreign exchange developments. “
ECB said it will take the updated growth rate and inflation forecast for November to redefine the right “tools” to cope with the situation.
The ECB made a pledge more than a day after France, Germany, Italy and Spain imposed new restrictions to prevent a second wave of COVID-19 outbreaks, which are expected to cause additional economic damage. to these countries.
ECB has implemented a program to buy bonds worth 1,350 billion euros to keep loan fees low and boost the economy. Many observers hope this program will be promoted at the ECB monetary policy meeting in December.
On the same day, ECB Chairman Christine Lagarde said that the Eurozone is losing its recovery momentum due to the second epidemic wave, which has forced many countries to impose new restrictions.
Speaking to reporters in Frankfurt (Germany), Ms. Lagarde said that the Eurozone recovery is losing momentum at a faster rate than expected after a strong but uneven recovery in economic activity in the months. Last summer.
According to the ECB President, a sharp increase in the number of COVID-19 cases, coupled with increased prevention measures since the summer, reduces the region’s prospects for recovery in the short term.