The ECB just announced $676 billion of new stimulus to fight the coronavirus

  • The European Central Bank increased its Pandemic Emergency Purchase programme by a further 600 billion euros ($US676 billion) on Wednesday.
  • Markets were largely expecting a 500 billion euros ($US563 billion) increase.
  • The new package takes the ECB’s total announced monetary stimulus to 1.35 trillion euros ($US1.52 trillion).
  • ECB also extended its horizon for net purchases until at least June 2021.
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The European Central Bank announced added a further 600 billion euros ($US676 billion) to its coronavirus rescue plan Thursday, bringing the total stimulus package to an astonishing 1.35 trillion euros ($US1.52 trillion).

Markets were expecting a 500 billion euros increase ($US563 billion) to the ECB’s so-called Pandemic Emergency Purchase programme.

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The European Central Bank said in a statement: “In response to the pandemic-related downward revision to inflation over the projection horizon, the PEPP expansion will further ease the general monetary policy stance, supporting funding conditions in the real economy, especially for businesses and households.”

The ECB also extended the horizon for net purchases under PEPP until at least June 2021.

The euro to dollar exchange rate is up 0.2% at 1.13.

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The announcement of a huge new injection of monetary stimulus comes the after the European Commission proposed a €750 billion ($US826 billion) fiscal stimulus programme.