• Lagarde: the ECB is ready for anything to support the Eurozone
  • Lagarde: "We need a strong budget response, cure everyone"

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30 April 2020 The ECB has left interest rates unchanged: the 'refi', the main refinancing rate, remains unchanged at 0%, that on marginal loans at 0.25% and that on deposits at -0.50%. The spread between BTP and Bund accelerates after the decisions of the ECB and reaches 240, at 239, with the Italian 10-year yield at 1.85%.

Ensuring liquidity
In response to the coronavirus pandemic, to maintain market liquidity and ensure credit flows to the economy, the ECB Governing Council has also decided to "further loosen" the conditions on Tltro3 auctions, with the possibility for institutions who will comply with the conditions set by Frankfurt, to enjoy an interest rate of 50 points lower than that in force on deposits in the period in question.

But the ECB also announces the launch of a new series of long-term refinancing operations (renamed Peltro, Pandemic emergency longer-term refinancing Operations) aimed precisely at supporting liquidity conditions in the financial system of the Eurozone.

These are seven additional auctions that will start in May 2020 with full allotment and a rate of 25 points lower than the refinancing rate in force. The Board also confirms the purchase plans already in force (the one of 20 billion per month - with an undefined duration - and the additional one of 120 billion by the end of 2020) and the reinvestment policy for the maturing securities.

"Purchases will continue to be conducted flexibly over time, between asset classes and jurisdictions. The Governing Council will make net purchases of assets under the PEPP until it believes that the coronavirus crisis phase has ended, but in any case until the end of this year. " This was decided by the Governing Council of the ECB.

ECB president Christine Lagarde, who will speak in the afternoon, warned EU leaders last week that the eurozone's GDP could drop by 15% this year.