The ECB will buy assets for 120,000 million to alleviate the effect of the coronavirus
FRANKFURT
Updated:
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The ECB has kept interest rates intact, but has released new injections of liquidity to maintain the right conditions in the financial markets during the coronavirus crisis. Lagarde will also add a temporary endowment of additional purchases of net assets of 120,000 million until the end of the year, "Ensuring a strong contribution from private sector purchasing programs." Its priority, therefore, is to shore up the liquidity of companies. In combination with the existing asset purchase program (APP), it will support favorable financing conditions for the real economy.
In a statement issued after the meeting of the Governing Council of the ECB in Frankfurt, it is in line with what the markets were demanding. The new decisions will help mitigate the problems of companies and families to maintain its activity at a time when the economy is paralyzing. Free liquidity will, however, require the tax packages that are being launched in several European countries, most notably Germany, which is in serious danger of going into recession in the first half of 2020.
The ECB reported after a Governing Council meeting that it wants "to provide immediate liquidity support to the euro area financial system, although it sees no material signs of tension in the money markets, or liquidity shortages in banking systems .
