But the central bank, which also took steps to boost liquidity, did not push interest rates deeper into negative territory, a move that some investors had been expecting.
Interest rates are already at historic lows in Europe, and economists had expressed concern that trimming them further would be insufficient to fight an economic shock. Still, the decision to keep rates steady fed a freefall in European stocks on Thursday, with Germany's DAX and France's CAC 40 extending losses to 8.8% and 9.5%, respectively.
As part of its package, the ECB said it would offer more generous loans to banks so they can keep lending to small businesses. And it will buy €120 billion ($134.8 billion) in additional bonds this year, supplementing €20 billion in existing monthly purchases ($22.5 billion).
The announcement, which was made following a scheduled meeting in Frankfurt, comes after the US Federal Reserve and the Bank of England both slashed interest rates by half a percentage point in emergency sessions, citing the risks the coronavirus poses to economic activity.
The moves have done little to placate nervous investors, who have kept selling risky assets at a rapid clip as panic grows.
Years of low interest rates and bond buying have left central banks with limited ammunition to deploy, restraining what policymakers can do should the crisis deepen and increasing pressure on individual governments to boost spending.
Yet even tax cuts and other stimulus measures are imperfect tools to combat the economic hit from the coronavirus, which has shuttered factories and depressed demand as people around the world hunker down and face restrictions on their movements.
"While these measures are pretty substantial, we do not think the ECB will be able to change investor sentiment any more than the Fed could last week," said Andrew Kenningham, chief Europe economist at Capital Economics. "What matters for the economy is the trajectory of the virus itself and the measures which national authorities take to contain it."
https://news.google.com/__i/rss/rd/articles/CBMiVWh0dHBzOi8vd3d3LmNubi5jb20vMjAyMC8wMy8xMi9pbnZlc3RpbmcvZXVyb3BlYW4tY2VudHJhbC1iYW5rLWNvcm9uYXZpcnVzL2luZGV4Lmh0bWzSAVlodHRwczovL2FtcC5jbm4uY29tL2Nubi8yMDIwLzAzLzEyL2ludmVzdGluZy9ldXJvcGVhbi1jZW50cmFsLWJhbmstY29yb25hdmlydXMvaW5kZXguaHRtbA?oc=5
2020-03-12 14:25:15Z
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