European Central Bank Takes Package to Address Outbreak Impact
Xinhua News Agency, Frankfurt, March 12 (Reporter Shen Zhonghao left) The European Central Bank held a monetary policy meeting on the 12th and decided to keep the euro zone's dominant interest rate unchanged while taking a package of measures to deal with the impact of the new crown pneumonia epidemic.
European Central Bank President Lagarde introduced that before the new round of targeted long-term refinancing operations in June, the European Central Bank will implement more temporary long-term refinancing operations to inject liquidity into the euro area financial system.
At the same time, the European Central Bank will provide more favorable conditions for targeted long-term refinancing operations implemented from June 2020 to June 2021, including lower interest rates, and support for euro area banks to provide loans to sectors affected by the epidemic. It's a SME.
The European Central Bank also decided to add an additional 120 billion euros in asset purchase plans by the end of this year, focusing on ensuring private sector bond purchases, with the aim of providing favorable financing conditions for the real sector when uncertainty increases.
Lagarde pointed out that the spread of the epidemic has impacted global and eurozone economic growth prospects and exacerbated market volatility. Due to the interruption of the supply chain, the production speed of enterprises has slowed down, and domestic and foreign demand has decreased. At the same time, increased uncertainty has negatively impacted corporate investment plans and their financing.
She called on countries in the euro zone to adopt strong and coordinated fiscal responses to support businesses and workers at risk.
On the same day, the European Central Bank's Banking Regulatory Commission also announced that through flexible supervision measures, more than 110 furniture system-important banks that support its direct supervision will continue to provide liquidity to the real economy in the euro area.
The European Central Bank's Banking Supervisory Committee Chairman, Enria said that the epidemic had a major impact on the euro area economy, and banks must be able to continue to provide financing to households and businesses that are experiencing temporary difficulties.
In addition, the European Central Bank lowered its economic growth forecast for the euro zone this year and next year to 0.8% and 1.3% respectively, and it is expected to grow by 1.4% in 2022. At the same time, it maintains the euro area inflation forecast unchanged, which is expected to be 1.1% in 2020 and 2021 and 2022. They are 1.4% and 1.6%, respectively.