FRANKFURT, Sept 10 (Reuters) - The European Central Bank left its ultra-easy policy unchanged on Thursday, keeping borrowing costs at a record low and promising copious asset purchases well into next year as the bloc works through its pandemic-induced recession.
Having extended stimulus in June, the ECB is already buying record amounts of debt so governments and firms can stay afloat during the downturn, giving policymakers time and space to consider their next move.
The economy has since grown in line or even ahead of the ECB’s expectations, further reducing any urgency for more central bank action.
But economists say that further ECB stimulus is only a question of time, since the recovery appears to be losing momentum, inflation has turned negative and a strong euro is also likely to dampen growth.
Addressing the question of the euro is likely to be the focus of ECB President Christine Lagarde’s 1230 GMT news conference and economists expect her to talk down the currency by hinting at more ECB action later.
With Thursday’s decision, the ECB remains on track to buy up to 1.35 trillion euros worth of debt through June 2021 under its Pandemic Emergency Purchase Programme, plus several hundred billion euros through other purchase schemes.
It also kept its deposit rate unchanged at a record-low minus 0.5% while the main refinancing rate remains at zero.
Attention now turns to ECB President Christine Lagarde’s 1230 GMT news conference, at which she will unveil new economic projections, discuss the euro and may hint at the bank’s next move, now projected by economists to come in December. (Reporting by Balazs Koranyi; Editing by Catherine Evans)
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