Summary: experts believe that the European Central Bank will maintain loose monetary policy in the short term

Xinhua news agency, Frankfurt, January 21: experts believe that the European Central Bank will maintain loose monetary policy in the short term. Xinhua News Agency reporter Shao Lizuo held a monetary policy meeting for the European Central Bank on the 21st, and decided to continue to implement a package of loose monetary policies such as asset purchase plan and targeted long-term refinancing operation. The decision met general expectations. Experts expect the ECB to maintain loose monetary policy in the short term, but will be ready to respond to emergencies. According to the monetary policy decision released by the European Central Bank, the emergency asset purchase plan with a total scale of 1.85 trillion euro will last at least until March 2022, until the European Central Bank determines that the new crown crisis is over. Meanwhile, the 20 billion euro a month regular bond purchase program will last long enough and is expected to end before the first interest rate increase in the future. On the same day, the European central bank reiterated the impact of Euro appreciation on inflation and stressed that it is ready to use all policy tools to guarantee favorable financing conditions and promote the realization of inflation target. Eurostat data show that inflation in the euro zone has been negative for five consecutive months. The Council of the European Central Bank said in a statement on the 21st that, affected by the low base of energy prices and the end of German VAT concessions, the inflation level in the euro area will rise in the next few months, but the long-term inflation expectation will remain at a low level. Barclays Bank covid-19 experts believe that euro zone inflation will rise this year and is expected to reach around 1% by 2023, roughly the same level as before the outbreak of the new crown. Anatoly anninkov, economist of Societe Generale, said in a research report that it is more realistic for the European Central Bank to maintain loose financial conditions and as low as possible financing costs than to achieve the 2% inflation target in the next two or three years, and it is expected that the European Central Bank will hold still in the short term. European Central Bank President Christine Lagarde stressed the “high flexibility” of monetary policy on the 21st, that is, adjusting the scale of emergency asset purchase plan according to changes in financing conditions. Christoph coulter, head of the interest rate strategy and government bonds Department of the German central Cooperation Bank, believes that increasing or decreasing the scale of emergency bond purchase when necessary will give the European central bank more room for policy maneuver in response to the epidemic. Kasten brzewski, head of macro research at ING Group, pointed out that the European Central Bank expressed a further wait-and-see attitude and reserved all policy options. Without serious problems, the ECB’s position is likely to last at least until the end of the summer.

(editor in charge: Zhu Xiaohang)


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