ECB Holds Key Interest Rate at 0%... Decides to Maintain Bond Purchase Size and Pace (Update)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The European Central Bank (ECB) announced that it will keep the key interest rate at 0% and maintain the current scale and pace of bond purchases, continuing its accommodative monetary policy. This decision to maintain the current monetary policy is interpreted as a response to concerns that the economic impact of the COVID-19 spread will persist.

On the 22nd (local time), the ECB held its April monetary policy meeting in Frankfurt, Germany, and decided to keep the key interest rate at the current 0%, while also maintaining the deposit rate and marginal lending rate at -0.50% and 0.25%, respectively.

To respond to the economic shock caused by the COVID-19 outbreak, the ECB also announced that it will maintain the bond purchase volume under the Pandemic Emergency Purchase Programme (PEPP) at 1.85 trillion euros (approximately 2,490 trillion won) until the end of March next year. Additionally, liquidity supply through the Targeted Longer-Term Refinancing Operations (TLTROⅢ) will continue, and the Asset Purchase Programme (APP) will also be sustained at a scale of 20 billion euros per month.

In the monetary policy statement released that day, the ECB added, "We stand ready to use all appropriate instruments to ensure that inflation moves towards our target in a sustained manner."