ECB backs bond buying, will do ‘whatever it takes’ after the Russo-Ukrainian war

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The European Central Bank has pledged to “take whatever action is necessary” to protect financial stability in the wake of Russia’s war with Ukraine.

owed, it will ease its 1.8 billion euro pandemic bond-buying program by the end of the month and has ended net buying under a separate plan, as it seeks to keep rising inflation in check. and hit the 2pc target in the medium term.

The ECB’s 25-member Governing Council said in a statement it was “ready” to revise that schedule should inflation forecasts change.

ECB President Christine Lagarde said any rate hikes would come “some time after the end” of net asset purchases, Christine Lagarde said on Thursday. These purchases will close in Q3 if inflation remains high.

“Russia’s invasion of Ukraine is a watershed moment for Europe,” the statement said.

“The Board of Governors expresses its full support for the Ukrainian people. It will ensure smooth liquidity conditions and implement sanctions decided by the European Union and European governments.

“The Board of Governors will take whatever action is necessary to fulfill the ECB’s mandate to pursue price stability and protect financial stability.”

Monthly net buying under the asset purchase program (APP) will amount to 40 billion euros in April, 30 billion euros in May and 20 billion euros in June, and will end in the third quarter if inflation remains high .

The ECB planned to maintain purchases under APP at 40 billion euros until June and begin to gradually decrease in the third quarter. It said net buying in the third quarter “will depend on the data and reflect its evolving assessment of the outlook”.

Eurozone inflation stood at 5.8 percent in February, a new record for the 19-member monetary union.

Ireland’s consumer price index rose 5.6 percentage points in the year to February 2022, the biggest gain in nearly 21 years, the Central Statistics Office said on Thursday. Inflation in Ireland was 5.7 percent in February according to the EU harmonized index.

AIB chief economist Oliver Mangan predicted this week that the inflation rate could soar as high as 9pc following Russia’s invasion of Ukraine, and that growth is likely to slow.

A senior EU official said on Thursday that the economic impact on the eurozone “could be severe but bearable” and inflation stalled – high inflation coupled with low growth and low inflation. rising unemployment – not “where we’re headed at the moment”.

“So [the] Current expectations are that growth will continue, albeit at a significantly slower pace and with stronger inflationary pressures than we previously anticipated,” the official said.

KBC Bank economist Austin Hughes said inflation will be higher in March and possibly even higher in April, with the spillover effects of runaway energy costs having a larger impact on food prices. , transportation and other goods and services.

Mr Hughes said a Small Budget was now needed to boost social welfare, cut petrol and diesel costs and link income tax credits to inflation.

EU leaders will meet today and tomorrow in Versailles, a meeting originally organized by France to focus on the bloc’s “new investment and growth model” but has been surpassed by events in Ukraine via.

https://www.independent.ie/business/world/ecb-pares-back-bond-buying-will-do-whatever-is-needed-in-wake-of-russia-ukraine-war-41431949.html ECB backs bond buying, will do ‘whatever it takes’ after the Russo-Ukrainian war

Fry Electronics Team

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