ECB steps up liquidity amid Covid-19 crisis

FRANKFURT – The European Central Bank (ECB) on Thursday decided to leave key interest rates unchanged but rolled out a comprehensive package of monetary policy measures to ensure liquidity support amid Covid-19 concerns.

The stimulus package includes additional longer-term repo operations, known as LTROs, to provide immediate liquidity support to the euro area financial system, according to a statement released by the ECB.

More favourable terms will be applied to the targeted longer-term refinancing operations, or TLTRO III, to support bank lending to those affected most by the spread of the coronavirus, in particular small and medium-sized enterprises, the central bank said.

A temporary envelope of additional net asset purchases of €120 billion will be added until the end of the year, ensuring a strong contribution from the private sector, the ECB said, which will, along with the existing asset purchase program, “support favourable financing conditions for the real economy in times of heightened uncertainty.”