ECB keeps interest rate at 0%

The European Central Bank has kept its key interest rates at historic lows and expanded its stimulus program, Report informs referring to the DW.

The 25-member governing council left its benchmark refinancing rate at 0 percent and its deposit rate at negative 0.5 percent - meant to encourage banks to lend money rather than to hold onto it.

It also expanded its emergency bond-buying program by 500 billion euros ($604 billion), bringing it to a total of 1.85 trillion euros.

This will be achieved with newly-printed money; it aims to drive down longer-term borrowing costs and help keep credit affordable and plentiful for consumers, businesses and governments.

The program has been extended to the end of March 2022, from its original expiration date of June 2021.

With the pandemic worsening, the eurozone economy is expected to shrink again in the last quarter. Quarter-on-quarter, the eurozone rebounded in Q3 after a Q2 period blighted by initial lockdowns in a string of countries. Year-on-year growth rates are down across the board since the pandemic reached the continent.

Mass vaccinations should begin early next year, but it could take many months for enough people to be vaccinated that it properly limits the spread and helps the economy open up fully.

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