ECB announced a package of measures today, including expanding and extending the pandemic emergency purchase programme (PEPP). The measures are “to preserving favourable financing conditions over the pandemic period, thereby supporting the flow of credit to all sectors of the economy, underpinning economic activity and safeguarding medium-term price stability.” ECB also stands ready to ” stand ready to adjust all of its instruments, as appropriate”
The central bank left main refinancing rate unchanged at 0.00% as widely expected. Marginal lending rate and deposit rate are held at 0.25% and -0.50% respectively. The asset purchase programme (APP) purchase will continue at a monthly pace of EUR 20B.
The envelop of the pandemic emergency purchase programme (PEPP) is raised by EUR 500B to a total of EUR 1850B. The program will also be extended to “at least the end of March 2022”. The third series of targeted longer-term refinancing operations (TLTRO III).is extended by 12 months to June 2022, with three additional operations to be conducted between June and December 2021. The total amount that counterparties will be entitled to borrow in TLTRO III operations from 50 per cent to 55 per cent of their stock of eligible loans. ECB also decided to extend the collateral easing measures to June 2022. Four additional pandemic emergency longer-term refinancing operations (PELTROs) will be offered in 2021.
