ECB takes action to boost liquidity, keeps rates unchanged

  • The European Central Bank says additional longer-term refinancing operations (LTROs) will be conducted, temporarily, to provide immediate liquidity support to the euro area financial system.
  • The LTROs will provide liquidity at favorable terms to bridge the period until the TLTRO III operation in June 2020.
  • In TLTRO III, considerably more favorable terms will be applied during the period from June 2020 to June 2021 to all TLTRO III operations outstanding during that same time.
  • A temporary envelope of additional net asset purchases of €120B ($135B) will be added until the end of the year.
  • Keeps interest rates unchanged with main refinancing operations at 0.00%, marginal lending facility rate at 0.25%, and deposit facility rate at -0.50%.
  • The euro gains 0.2% against the U.S dollar.
  • Reinvestments of the principal payments from maturing securities purchased under the asset purchase program will continue, in full, for an extended period of time past the date when the governing council starts raising the key ECB interest rates.
  • ETFs: VGK, FXE, EUO, FEZ, HEDJ, EZU, IEV, OTC:ERO, IEUR, EPV, EURL

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