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European Central Bank to release interest rate decision


European Central Bank to release interest rate decision

Photo: Reuters/Kai Pfaffenbach

The European Central Bank (ECB) will today release its interest rate decision.

Since 2016, the ECB has fixed interest rates at 0%. While rates are forecasted to remain unchanged, ECB will likely raise bond purchases. After its monetary policy meeting in Frankfurt, expect ECB president Christine Lagarde to underscore the current state of the Eurozone’s economy amid a fresh surge in COVID-19 cases. Lagarde will also detail possible asset purchases within the framework of the $2.2 billion Pandemic Emergency Purchase Program (PEPP) with the hope of obtaining full financial recovery this year.

Anxious about public debt overflow within the Euro zone, the ECB will prioritize maintaining its monetary and fiscal policy to achieve financial market stability. Despite a drop in mass production due to strict lockdown procedures in most EU countries, expect the Euro to remain unaffected. Moving forward, the Euro will strengthen further in the expense of emerging market currencies. As the EU’s vaccination program gathers pace, the economic output of the EU will likely see a significant boost. The ECB will continue to pursue its objective of keeping inflation rate below 2% in order to maintain steady interest rates and preserve cheap capital loans.

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