By Geoffrey Smith
Investing.com — The European Central Bank said Thursday it will increase the size of its main pandemic-fighting bond purchase program by 600 billion ($672 billion), ramping up its efforts to support a Eurozone economy that is expected to shrink by more than 8% this year.
The ECB also said after its regular council meeting that it will stretch the purchases under the Pandemic Emergency Purchase Program out until at least the middle of next year. “In any case, the Governing Council will conduct net asset purchases under the PEPP until it judges that the coronavirus crisis phase is over,” it added.
The bank made no other major changes to its policy stance, leaving its key interest rates unchanged, as expected and not changing the overall volume of its other bond purchases, which will continue to run at 20 billion euros a month.
The euro hit its highest level in nearly three months against the dollar on the news, reflecting that a minority of investors had expected a further cut in the -0.5% deposit facility rate. By 7:57 AM ET (1157 GMT), the euro was up 0.3% at $1.1268, just off its earlier high of $1.1272.
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