European Central Bank keeps rates on hold, mulls post-pandemic economy

The European Central Bank (ECB) left its emergency monetary plan on hold on Thursday as it begins to lay the groundwork for reviewing the programme’s measures, which are aimed at curbing the economic fallout from the global coronavirus crisis.

The ECB said it left its benchmark refinancing rate at zero and pledged to maintain its €1.85-trillion ($2.2-trillion) asset purchasing stimulus scheme through to March 2022, or until the point when it judges that the corona crisis is over.

This week’s meeting of the Frankfurt-based bank’s 25-member governing council was seen by analysts as setting the stage for a key meeting in June, when ECB President Christine Lagarde will unveil a new round of euro zone economic growth and inflation projections.

“In June, the euro zone should have seen some reopenings, there will be new staff projections and the ECB will reassess the pace of its asset purchases,” said ING Bank economist Carsten Brzeski.

Analysts estimate that average net weekly purchases have increased from about €14 billion ($17 billion) to 17 billion euros after Lagarde announced plans in March to “significantly” step up the pace of bond purchases.

In its statement on Thursday, the ECB said it expects to continue the purchases at the higher rate during the current quarter.

Up until now, the euro zone has struggled to replicate the economic rebound under way in nations such as the United States and China following the launch of lockdown measures across the currency bloc and a shambolic start to the region’s vaccination programme.