ECB is ready to extend its money printing operation


The European Central Bank (ECB) is about to extend its borrowing programme, specially designed for the the crisis, for a further year. This decision could be made public by the next Thursday.

In March, the ECB announced the purchase of EUR 750 billion of bonds to allow sufficient money to flow into the economy in the midst of the crisis. This amount was then raised to a total of EUR 1350 billion, with a duration of the crisis programme until the end of June 2021 at the latest.

According to sources from Bloomberg, policymakers are almost agreed that the comprehensive buy-up programme should last at least 12 months longer. This would mean that the purchase of debts, which would deliberately keep interest rates low, would last at least until mid-2022.

ECB president Christine Lagarde made it clear in the previous interest rate decision that the central bank will come up with additional incentives this month. An extension of the buy-up programme is in line with expectations. Economists surveyed by Bloomberg assume, on average, that the ECB will buy up additional debts amounting to EUR 500 billion, with the total programme amounting to EUR 1850 billion.