ECB Holds Key Interest Rate at 0%... Continues Slowed Pace of Bond Purchases (Comprehensive)

COVID-19 Response Bond Purchase Scale Expected to Be Maintained Until the End of March Next Year

European Central Bank (ECB) headquarters in Frankfurt, Germany
[Image source=Reuters News Agency]

[Asia Economy Reporter Minwoo Lee] The European Central Bank (ECB) has once again kept its key interest rate at 0%. It also decided to maintain the pace of bond purchases, which had been slowed down in response to the economic shock caused by COVID-19.

On the 28th (local time), the ECB held a monetary policy meeting in Frankfurt, Germany, and decided to keep the key interest rate at the current 0%. The deposit rate and marginal lending rate were also maintained at -0.50% and 0.25%, respectively.

Despite severe inflation in Europe, the ECB decided to continue its accommodative monetary policy. In fact, the consumer price inflation rate in the Eurozone (19 countries using the euro) reached 3.4% in September, marking the highest level in 13 years.

The ECB also decided to maintain the pace of bond purchases under the Pandemic Emergency Purchase Programme (PEPP), which was introduced to respond to the economic shock caused by the spread of COVID-19. Earlier last month, the ECB had lowered the pace of COVID-19 response bond purchases for this quarter for the first time in six months and has maintained that pace for two months. This time, it decided not to change this stance.

Accordingly, the scale of bond purchases under the program is expected to be maintained at least until the end of March next year at 1.85 trillion euros (approximately 2,513 trillion won).

The ECB also plans to continue providing liquidity through the Targeted Longer-Term Refinancing Operations (TLTRO III) and maintain the Asset Purchase Programme (APP) at a scale of 20 billion euros per month.

This content was produced with the assistance of AI translation services.