The European Central Bank increases the penalty rates and buys the bonds again ONLINE TIME


the European Central Bank (ECB) raised penalties for banks and resumed controversial bond purchases. Instead of 0.4 percent, banks will have to pay 0.5 percent interest in the future if they deposit money with the central bank, like the ECB announced. The ECB Council has also decided to invest € 20 billion in securities on a monthly basis from 1 November.

This tightened the central bank at the end of the mandate of The president of the ECB
Mario Draghi
their easy monetary policy again. The key interest rate, the
from March 2016 the minimum of zero per cent remains
unchanged at this level.

With the penalty rate, the ECB wants to convince the banks
Earn more money in the form of loans to businesses and consumers to support the economy. This should also the
Increase inflation. In order to alleviate some of the banks, the ECB introduces a graduated rate for certain quotas.

At the end of December, for the moment the ECB had concluded the purchase of government and corporate bonds. However, funds from maturing securities are reinvested. From March 2015 to the end of 2018, the ECB purchased bonds for around 2.6 trillion euros.

ECB far from the target of inflation

Buying government bonds helps eurozone countries get more money. Because when the ECB buys large stakes, it must not offer such high interest rates on its securities.

In all likelihood, the ECB will continue to stick to its monetary policy in the future. Draghi is the designated successor of the ECB's leadership,
the French Christine Lagarde, has already clarified that she
considers that a very broad monetary policy is needed for the near future.

In the medium term, the ECB is aiming for an inflation rate of just under 2.0 per cent in the euro area. It's far enough
away from the zero sign. Because they are considered permanently low prices
Risk to the economy. Businesses and consumers could therefore
Postpone investments because they hope they will be cheaper soon
is. In August, inflation remained at 1.0%, the lowest level
for more than two and a half years.

. (dayToTranslate) Economy (t) ECB (t) ECB (t) Mario Draghi (t) Inflation (t) Monetary policy


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