BERLIN, Apr 30 (NNN-DPA) – The European Central Bank (ECB) is taking its first steps today, towards beefing up its monetary stimulus action plan, as a recession unleashed by the COVID-19 crisis, engulfs the Eurozone.
Analysts expect the Frankfurt-based ECB to announce it will maintain interest rates at historic lows, leaving the bank’s benchmark refinancing rate at zero and its deposit rate, which sets the rate for banks parking funds at the ECB, at minus 0.5 percent.
But financial markets will be looking to ECB chief, Christine Lagarde’s Thursday press conference, for indications about the bank’s plans for its “pandemic emergency” programme.
While analysts have not ruled out the ECB acting again this week, most expect Lagarde to signal moves for the bank to top up its monetary stimulus programme, at its June meeting.
Last month, the Frankfurt-based ECB fired off a 750-billion-euro (815-billion-dollar) bazooka of bond-buying, aimed at stabilising the 19-member Eurozone economy.
But, since then, bond yields came under renewed pressure, oil prices collapsed, and economic confidence essentially evaporated across the 19-member currency bloc, as the region faces up to a recession of historic proportions.
The recent dramatic fall in oil prices, also raised the threat of Eurozone stumbling into a damaging period of deflation, adding to the pressure on the ECB to expand its bond-buying scheme.
Lagarde’s press conference today is also to be conducted against the backdrop of the release of a slew of key Eurozone economic data, including first quarter gross domestic product, corporate liquidity, unemployment and inflation.– NNN-DPA
