The European Central Bank (ECB) stated at its September meeting that it will continue the Pandemic Emergency Procurement Program (PEPP) at the amount of 1.35 billion EUR, while keeping interest rates unchanged. The bank decided to continue at the current level by not making additional moves in monetary incentives during the recovery from the coronavirus crisis and the economic recovery phase. While PEPP will continue at least until June 2021, the principals will continue to be reinvested at least until the end of 2022.
Purchases under the asset purchase program (APP) continue at a monthly rate of 20 billion EUR. The Governing Council will continue to expect monthly net asset purchases under the APP to continue as long as necessary to strengthen the supportive effect of policy rates, and to end shortly before they start hiking interest rates. The bank will also continue to provide ample liquidity through refinancing operations. In particular, the latest operation in the third series of targeted long-term refinancing operations (TLTRO III) involves a very high use of funds that support the lending of banks to firms and households.
While the ECB revised its expectation of contraction from 8.7% in June to 8%, it determined its 2021 and 2022 expectations as 5% and 3.3% growth, respectively. June projections were at 5.2% and 3.2% levels. Limited changes have been made in expectations for the future. At the point of its approach to the EUR exchange rate, which is the most focal point of the Bank, the view that it is not at the point of emergency at the moment comes to the fore. The appreciation of the EUR may make it difficult for the Bank in the sense that the economic recovery loses momentum, creates deflation risk by lowering import prices and decreases export capability. Lagarde said in her speech that policy makers discussed the strength of the EUR but are not targeting the currency level. A strong EUR continues to be a challenge for bank policies and a shift towards the idea of additional monetary expansion if downside risks in the economy increase, is still an option hidden.
“Burada yer alan yatırım bilgi, yorum ve tavsiyeleri yatırım danışmanlığı kapsamında değildir. Yatırım danışmanlığı hizmeti, yetkili kuruluşlar tarafından kişilerin risk ve getiri tercihleri dikkate alınarak kişiye özel sunulmaktadır. Burada yer alan yorum ve tavsiyeler ise genel niteliktedir. Bu tavsiyeler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabilir. Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.”
Kaynak Tera Yatırım
Hibya Haber Ajansı