European Central Bank Holds Key Interest Rate Steady... "Continued Provision of Sufficient Liquidity"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the spread of the novel coronavirus infection (COVID-19) continues unabated in Europe, the European Central Bank (ECB) announced on the 21st (local time) that it has kept the key interest rate at 0%, according to Bloomberg News and others.

According to reports, the ECB held a monetary policy meeting on the day and decided to maintain the key interest rate at the current 0%, and keep the deposit rate and marginal lending rate at -0.50% and 0.25%, respectively. It also decided to maintain the size of the Pandemic Emergency Purchase Programme (PEPP).

The ECB stated that it will supply sufficient liquidity for a long period and reaffirmed that it will maintain an accommodative monetary policy for the time being. As concerns over a 'double dip' recession grew due to the lack of signs that the COVID-19 resurgence in Europe would subside despite vaccine supply, the ECB sent a message that it will actively inject funds into the market.

In December last year, the ECB expanded the PEPP size by 500 billion euros from the initial 1.35 trillion euros to 1.85 trillion euros to respond to the economic damage caused by the spread of COVID-19. The net purchase period was also extended by nine months from the end of June next year to the end of March 2022.

ECB President Christine Lagarde is scheduled to hold a press conference this afternoon.