Increased Credit Purchase “Proportional Response” |

The European Central Bank (ECB) sees a significant increase in the rate of acquisition of securities by the epidemic as a “proportional response to risks,” indicating a rise in interest rates in financial markets to financial conditions.

In the minutes of the monetary policy meeting on Thursday, March 11, the ECP said that the rise in interest rates could reverse the currency stimulus, at which point it was “necessary to maintain favorable fiscal conditions to support the economy.” .

At that meeting there was a broad consensus among the members of the governing body, raising interest rates without risk; Sovereignty by weight in GDP (GDP) requires an increase in the borrowing rate for profitability.

They felt it was reasonable to make a “significant increase” in the pace of bond acquisitions due to the epidemic in the second quarter. This is because financial conditions have deteriorated before growth and inflation have improved.

Getting an emergency loan

The ECP In March, it increased borrowings from its emergency loan acquisition plan due to the epidemic to, 73,521 million (59 59,914 million in February and, 53,046 million in January).

Governing body members generally noted that “the recent tightening of financial conditions was a foregone conclusion for the euro area”; It is in a weaker cycle than the United States.

A large-scale currency expansion in the euro area is essential.

The ECP also believes that bond purchasing on a flexible basis is “an appropriate tool of monetary policy”; Maintaining favorable financial conditions during epidemics due to high uncertainty is “very efficient”.

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