[ad_1]
Mario Draghi, President of the European Central Bank (ECB), attends a press conference on the results of the Governing Council meeting at the ECB's headquarters in Frankfurt, Germany, on 7 March 2019.
Kai Pfaffenbach | Reuters
The European Central Bank (ECB) on Thursday announced a massive new bond buying program with the aim of boosting the troubled economy of the eurozone.
President Mario Draghi announced that the central bank would reduce its main deposit rate by 10 basis points, to -0.5%, in line with expectations. The ECB now expects interest rates to remain at current or lower levels until the prospects for inflation converge robustly to a level sufficiently close to 2% but lower than that of its projection horizon, and this convergence is persistent ".
The ECB also changed its TLTRO rate to provide more favorable bank credit conditions equivalent to its refinancing rate, erasing a previous spread of 10 basis points. In line with market expectations, the ECB also introduced rate prioritization, a move encouraged by the leaders of various major European banks during the final earnings season.
The quantitative easing program of the central bank will represent 20 billion euros a month in asset purchases, as long as it deems necessary.
Markets were generally waiting for some form of stimulus package, but hawks from the European Central Bank (ECB) Board of Governors have taken steps to minimize the scale of the impending measures.
The slowdown in the Eurozone economy, continued weakness in inflation and the US-China trade war showed that the central bank was forced to inject stimulants.
Recent economic data is not promising, although the latest Purchasing Managers' Indexes (PMI) have indicated some stability despite the continuing weakness of the industry.
This is a last-minute story, please check later for more.
[ad_2]
Source link