ECB rolls out fresh stimulus package amid pandemic resurgence

Friday, 2020-12-11 11:11:03
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European Central Bank (ECB) President Christine Lagarde speaks at a press conference at the ECB headquarters in Frankfurt, Germany, on Dec. 10, 2020. (Photo: Xinhua)
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The European Central Bank (ECB) said on Thursday that it decided to expand the pandemic emergency purchase program (PEPP) by another EUR500 billion (US$605 billion) and extend the duration of the program to at least the end of March 2022, as part of a fresh stimulus package to bolster the economy.

The newly announced measures were taken "in view of the economic fallout from the resurgence of the pandemic," the ECB said in a statement after a monetary policy meeting.

The PEPP was first launched in March this year and was expanded by EUR600 billion in June. The program now stands at a total of EUR1.85 trillion.

The ECB also strengthened support for bank lending, namely the third series of targeted longer-term refinancing operations (TLTRO III). It will extend the temporary favorable terms for the program to June 2022, and add three additional operations between June and December 2021.

Four additional pandemic emergency longer-term refinancing operations (PELTROs) will be offered in 2021, which will continue to provide an effective liquidity backstop, the ECB also said.

Eurozone key interest rates will remain at ultra-low levels, with the base interest rate, marginal lending rate and deposit rate unchanged at 0.00 percent, 0.25 percent and minus 0.50 percent, respectively.

The ECB also extended the duration of many temporary favorable conditions announced earlier this year. It extended reinvestment of principal payments from maturing securities purchased under the PEPP until at least the end of 2023, and also extended the duration of the set of collateral easing measures announced in April this year to June 2022.

The regular asset purchase program (APP) will continue at a monthly pace of EUR20 billion, it added.