The European Central Bank keeps interest rates at their lowest levels despite signs of recovery and rising inflation


The European Central Bank kept the interest rate at a record low yesterday, and did not change the plan for emergency monetary stimulus, despite indications of economic recovery after the pandemic and the recent rise in the inflation rate.
The bank launched the program in March 2020 when the pandemic hit the 19 eurozone countries, and the program was aimed at strengthening the eurozone economy to face one of the worst crises in a generation and to deal with the threat of declining inflation.
The program will continue until next March, or “until the bank decides that the phase of the Corona virus crisis is over,” according to “Al Almanya.”
The program was strengthened and extended during the past 12 months, in light of the bank’s attempt to reduce the economic repercussions of the Corona virus crisis.
However, the new economic growth and inflation expectations, which Lagarde revealed during yesterday’s press conference, confirmed that the eurozone economy will move forward this year, in light of high inflation rates and a decrease in new cases of Corona virus.
In a statement yesterday, the bank indicated that it will not rush to adjust lending costs. The refinancing rate has remained at zero since March 2016, and the bank has also kept the deposit rate unchanged at negative 0.5 percent, and the marginal lending rate at 0.25 percent.
In turn, European Central Bank President Christine Lagarde confirmed that no immediate steps were taken to start ending the 1.85 trillion euro ($2.25 trillion) monetary aid plan.
And she said that doing so “would be premature, as the governing council of the European Central Bank did not discuss the emergency bond purchase program to confront the Corona pandemic,” according to “The German.” “It’s too early and too early,” she added.
Instead, she noted, the Frankfurt-based bank will continue to purchase under the program over the next quarter “at a significantly higher pace than during the first months of the year”. “We are still very far from our target for the inflation rate, which is around 2 percent,” she said.


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