European Central Bank (ECB) kept interest rates unchanged, and the euro appreciated
ECB decided to maintain the refinancing rate at 0%, lending interest rate at 0.25% and deposit interest rate at -0.5%.
Not out of prediction, the latest meeting of the European Central Bank (ECB) ended with the decision to keep key interest rates unchanged, while keeping the current economic stimulus programs to cope with pandemic COVID-19.
Specifically, the ECB decided to maintain the refinancing rate at 0%, the lending interest rate at 0.25% and the deposit interest rate at -0.5%.
After the decision was announced, the euro continued to strengthen against the dollar, amid expectations of a new major stimulus package by the US under the administration of new President Joe Biden fueled optimism. markets and reduces demand for safe-haven currencies like the US dollar.
The euro rose 0.4 percent against the dollar and traded at $ 1,2153 per euro in minutes after the ECB decided not to change its monetary policy and left the possibility open for further stimulus. New likes for dealing with the raging COVID-19 pandemic.
Now the market’s attention is shifting to ECB President Christine Lagarde’s 13:30 GMT press conference, in anticipation that she will mention the failures of Europe’s fight against COVID-19, as well as a stronger euro could affect the forecast for regional economic growth for 2021.
Many European governments once again implemented stringent restrictive measures to control the second wave of COVID-19 infection, while a new variant of the SARS-COV-2 virus emerged with the possibility of spread more rapidly in the UK and South Africa.
The lower than expected COVID-19 vaccine availability of the first batches, especially in the European Union, has raised further concern that a pandemic could have longer effects.
In December 2020, the ECB forecasts Eurozone economic growth to be 3.9% by 2021, after an estimated 7.3% decline in 2020.