Key interest rate unchanged at 0.0 percent
The tightened restrictions on the economy in many euro countries are not causing Europe's monetary authorities to act again. It was only in December that the European Central Bank (ECB) stepped up massively in the fight against the economic consequences of the corona pandemic. As expected, at its first meeting in the new year on Thursday, the ECB Council confirmed the expansive monetary policy of the central bank in Frankfurt.
The emergency purchase program for government bonds and corporate securities (Pandemic Emergency Purchase Program / PEPP), which was increased by 500 billion six weeks ago, will now run unchanged at a volume of 1.85 trillion euros until at least the end of March 2022.
The purchases help states and companies alike: they do not have to offer such high interest rates for their securities if a central bank is a big buyer in the market. This is particularly important for states because they launched rescue programs worth billions during the Corona crisis that need to be financed.
In order to support the commercial banks as financiers during the crisis, the central bank issued further particularly cheap long-term loans (PELTROs) in December and relaxed the conditions for long-term loans that were already running.
In terms of interest rates, the rate also remains unchanged after the ECB meeting on Thursday: the key interest rate in the euro area is kept at a record low of 0.0 percent. Commercial banks still have to pay 0.5 percent interest when they park money at the central bank.
