ECB boosts Covid-19 asset purchase programme by €500bn, to conduct more liquidity auctions
By Alexander Bueso
Date: Thursday 10 Dec 2020
(Sharecast News) - Rate-setters in Frankfurt eased monetary policy further on Thursday, boosting the size of their asset purchase programme, as expected, alongside a barrage of other measures.
The European Central Bank kept all policy interest rates unchanged, as had been widely anticipated, although it did leave the door open to further cuts if needed.
Meanwhile, it added €500bn to its Pandemic Emergency Purchase Programme (PEPP), increasing the total envelope size to €1.85bn, and said purchases would run at least through March 2022 and in any case until the Covid-19 crisis was over.
The ECB's governing council also agreed to extend the duration of its easy financing to lenders through liquidity auctions, which are known by the acronym TLTRO III, until June 2022 and upped how much lenders could borrow against the loans that they could use for collateral at the ECB, from 50% to 55%.
All of that was on top of the addition of another three TLTRO III auctions and four more Pandemic Emergency Longer-Term Refinancing Operations (PELTROs).
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