Draghi brings the curtain down on QE, interest rates unchanged

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  • Economy
  • 5 months ago
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Mario Draghi will bring to an end one of his more controversial policies, as of the end of this month QE will cease to be, as will the purchase of bonds, from 15 billion euros to the round figure of 0.

The ECB still plans to reinvest funds from maturing bonds to purchase additional debt for a considerable amount of time, likely until 2021 and will allow policymakers to push it further at a low cost should the economy take a turn for the worst.

As the news made the wires the EURO dipped by 0.2% against the greenback trading at 1.1381.

The ECB's asset purchasing program — under which the bank bought more than 2.6 trillion euros ($2.9 trillion) — was introduced in March 2015 in a bid to rescue the euro zone economy from deflationary forces and rebuild confidence.

The announcements by Draghi seem to have put some life back into the single currency bloc, however some scepticism is still hovering.

ING chief economist Carsten Brzeski commented, "With the most prominent crisis-fighting measure of the ECB now almost back in the toolbox, the big question is, what will be next?"

"It seems as if the ECB wants to keep as many cards as possible close to its chest."

With that being said however there are still lingering issues such as the ongoing battle between Italy and Brussels over their budget plans, as is also France as Macron struggles to control the negative sentiment which has spilled on the streets of the French capital.

And needless to say, the Brexit conundrum still does not seem any closer to being solved regardless of Theresa May’s escape of a no-confidence vote.




Source: Smart Trend Team