FRANKFURT, July 16 (Reuters) – The European Central Bank left policy unchanged on Thursday, pausing after taking a series of unprecedented measures over the past four months to salvage an economy that is fighting its biggest recession in living memory due to the coronavirus.
The ECB is already buying record amounts of debt to keep borrowing costs down and pays banks to take its cash, all with the aim of tempering a pandemic-induced recession that could cut output by around one-tenth this year.
But recent economic data have beat expectations, suggesting that a recovery is underway, so there was little urgency for the ECB to do more, even if the risk of a new wave of infections means the outlook is still murky.
ECB policymakers are also keen to keep pressure on European Union leaders to finalise a long-delayed fiscal package that would help the central bank’s efforts to prop up the economy.
With Thursday’s decision, the ECB remains on track to buy up to 1.35 trillion euros worth of debt through next June under its Pandemic Emergency Purchase Programme and up to 1.8 trillion euros if other purchases are also included.
It also kept its deposit rate unchanged at a record low minus 0.5% while the main refinancing rate remains at zero.
Attention now turns to ECB President Christine Lagarde’s 1230 GMT news conference, where she is likely to discuss the relaunch of the ECB’s policy review, which it kicked off in January but put on hold due to the pandemic. (Reporting by Balazs Koranyi; Editing by Catherine Evans)
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