European Central Bank stays on hold, keeps 1.3t euro asset purchases

The European Central Bank has left eurozone interest rates unchanged today after a governing council meeting today.

The headline rate remains at 0.0 percent rate.

The ECB also says that it is pressing on with its 1.35 trillion euro program to protect the eurozone economy from the coronavirus crisis.

Today’s statement says the pandemic emergency purchase programme (PEPP) should cushion the ‘downward’ impact on prices during the pandemic.

These purchases contribute to easing the overall monetary policy stance, thereby helping to offset the downward impact of the pandemic on the projected path of inflation.

The ECB will continue to impose a negative interest rate -0.5 percent on commercial banks deposits left in its vault – to encourage lending, the Guardian reports. It will also maintain a rate of just 0.25 percent on its main refinancing operations – short-term loans to commercial banks

The ECB has also repeated its guidance that rates will not rise for some time:

The governing council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 percent within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.