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ECB chief Lagarde
Photo: Lu Yang / imago images / Xinhua
Even if the economy in the euro zone is currently recovering somewhat, the European Central Bank (ECB) is leaving key interest rates at their current record-low levels.
The key rate for supplying commercial banks with money thus remains at 0.0 percent, where it has been since March 2016.
The ECB is also not changing the deposit rate of minus 0.5 percent.
Banks must therefore continue to pay penalty interest if they park excess funds with the central bank.
The central bank also announced that it intends to increase the pace of purchases as part of the trillion-dollar crisis bond purchase program PEPP in the third quarter. The emergency purchase program for government bonds and corporate securities launched in spring 2020 has already been topped up twice. It has a purchase limit of 1.85 trillion euros, and purchases are expected to continue until at least the end of March 2022.
This means that the ECB will stick to its ultra-loose course to support the economy for the foreseeable future.
The monetary watchdog around central bank chief Christine Lagarde also adapted the monetary policy outlook to the changed requirements after their strategy renewal.
As part of the strategy check, the monetary authorities set themselves a new inflation target of two percent two weeks ago, after it had previously been below, but close to, two percent.
At the same time, they gave themselves a little more leeway in achieving their goal.
If interest rates are already extremely low, as is currently the case, the ECB believes that particularly powerful or long-lasting measures are necessary.
At its meeting, the ECB also decided to leave key interest rates at their current record low levels.
fdi / Reuters
