The European Central Bank is fighting the economic crisis with even more money. Interest rates remain at their historic lows.

In pandemic control mode: the ECB in Frankfurt

Dhe European Central Bank (ECB) will support the economy of the monetary union even more extensively in the future. The monetary authorities decided on Thursday to increase the PEPP (Pandemic Emergency Purchase Program) purchase program launched as a result of the coronavirus pandemic by 600 billion euros to a total of 1.35 trillion euros.

At the same time, the central bankers around ECB President Christine Lagarde decided to let this program run until at least June of next year. “In any case, the Governing Council will buy net securities under the PEPP until it judges that the phase of the coronavirus crisis is over,” said the ECB’s announcement.

In addition, the monetary authorities affirmed that they would continue their long-standing APP purchasing program. Independently of the PEPP program, it is currently acquiring securities worth EUR 20 billion each month. The major part flows into government bonds from member states of the monetary union.

The central bankers meanwhile left the most important interest rates unchanged at record-low levels: The key interest rate is thus still zero percent. The interest that banks have to pay for deposits on their central bank concentrations is still 0.5 percent.

Finally, the monetary authorities announced that they would adjust all their instruments if necessary in order to achieve the price level stability target. Like other central banks, the ECB is also aiming for a medium-term rate of inflation of close to 2 percent.