July 19, 2019 / 4:25 PM / 4 months ago

ECB plans to restart government bond purchases by November: Spiegel

FILE PHOTO: The euro sign is photographed in front of the former head quarter of the European Central Bank in Frankfurt, Germany, April 9, 2019. Picture is taken on slow shutter speed while zooming. REUTERS/Kai Pfaffenbach/File Photo

BERLIN (Reuters) - European Central Bank President Mario Draghi plans to restart purchases of government bonds by November to support the fragile euro zone economy, German news magazine Der Spiegel cited central bank sources on Friday as saying.

It said Draghi hoped the move would encourage companies to invest more and consumers to consume more.

Draghi’s term is due to end on Oct. 31 and International Monetary Fund chief Christine Lagarde has been nominated to succeed him. The European Parliament will hold a non-binding vote on her appointment, which is expected to be finalised by EU leaders at a regular summit on Oct. 17-18.

Last week, ECB Governing Council member Ignazio Visco said the central bank would need to adopt further expansionary measures if the euro zone economy does not pick up, and that it would consider its options “in the coming weeks”.

The ECB’s Governing Council put off any rate hike for at least a year at its June 5-6 meeting and Draghi opened the door to more stimulus in the following weeks. The Council is due to meet again to discuss monetary policy on July 24-25.

The ECB is considering raising the cost for banks to park their cash at the central bank in a bid to boost bank lending, Der Spiegel reported, citing sources as saying that such a decision was possible in September.

Reporting by Michelle Martin; Editing by Catherine Evans

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