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ECB needs to recover before ending Covid protection

London — The European Central Bank should look to secure a sustainable economic recovery following a coronavirus pandemic before ending its crisis response, Finland’s central bank governor told CNBC Thursday. It was.

“We are ready to readjust our purchases as needed. In that sense, as I said, I think it’s better to be safer than sorry, and the economy is really sustainably recovering. We’ll be pretty cautious about this to make sure we’re doing it, before moving to exit gear from a monetary easing perspective, “said Olli Rehn, Governor of the Central Bank of Finland, on CNBC’s Street Signs Europe. Told to.

“There are both upward and downward risks, depending on the rate of vaccine deployment and the degree of viral mutation. In this context, the best approach in monetary policy is simply to stay calm and keep the course,” he adds. I did.

His comment will come soon De Nederlandsche Bank Governor Klaas Knot Told Reuters The expected recovery in the eurozone economy in the second half of this year could allow the ECB to begin a phased abolition of emergency bond purchases in the third quarter.

Last month’s ECB Decided Increasing bond purchases within the € 1.85 trillion ($ 2.2 trillion) pandemic emergency purchase program (sometimes called PEPP). The move arose in fear that rising government bond yields (how much it would cost to borrow) could threaten Block’s economic recovery.

Many countries are tackling the third wave of coronavirus infection as the euro area is still awaiting a coronavirus rescue fund at EU level and the pace of vaccination lags behind other parts of the world. is. All of these factors pose a risk to the 19 economies that share the euro.

The International Monetary Fund said in its global economic outlook on Tuesday that the euro area is on track for growth of 4.4% this year, following a 6.6% contraction last year.

“In the short term, there is still a lot of uncertainty about the rate of vaccine deployment (and) the potential for viral mutations, but yes, we expect stronger recovery later this year and next year. And certainly, the outlook in this sense is more positive. “

“From a policy response perspective, those who are safer than regret and maintain a considerable degree of adaptation to monetary policy to build sturdy bridges over these problematic areas of the coronavirus pandemic. Is good. “

— CNBC’s Silvia Amaro contributed to this report.

ECB needs to recover before ending Covid protection

Source link ECB needs to recover before ending Covid protection

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