ECB adds €600 billion to asset purchase programme

The ECB is expanding its new government bond purchase programme by another €600 billion. The central bank announced this on Thursday well-known. The total size of the Pandemic Emergency Purchase Programme (PEPP) rises to €1.35 trillion. The support programme will remain active until at least the end of June next year.

According to the central bank, the expansion of this support programme will contribute to smooth lending for households and businesses. However, it is clear from the First results of the program that the central bank has bought mainly Italian government bonds in recent months. As a result, the asset purchase programme appears to be an instrument to support public finances rather than to help businesses and households.

ECB further expands asset purchase programme

Under the auspices of the Central Bank, the Central BankNew buy-back program more than €235 billion in debt securities. At that rate, the asset purchase program would reach its limit as early as October or November. By increasing the amount by €600 billion, the ECB has the scope to withdraw more debt from the market for longer.

ECB has already bought €235 billion of government bonds under the new PEPP programme (Source: Bloomberg)

In addition to this new purchase programme, the previously launched purchase programme will also remain active. Until the end of this year, the central bank will buy €140 billion a month in debt securities. As a result of all these programs, the central bank's balance sheet total will continue to grow. However, it remains to be seen whether that will help the economy much further.

You can watch the ECB's press conference below.

This contribution comes from Geotrendlines