ECB Resumes Quantitative Easing Amid Weak Growth

• ECB Resumes Quantitative Easing Amid Weak Growth

The European Central Bank (ECB) on Thursday introduced a new bond purchase program amid weak inflation rate and falling growth in the euro-area.

The central bank announced a monthly 20 billion euros asset purchases for as long as it is necessary.

According to Mario Draghi, the President, ECB, “In view of the weakening economic outlook and the continued prominence of downside risk, governments with fiscal space should act in an effective and timely manner.”

“In countries where public debt is high, governments need to pursue prudent policies that will create the conditions for automatic stabilizers to operate freely. All countries should reinforce their efforts to achieve a more growth-friendly composition of public finances,” he added.

The central bank also reduced main deposit rate by 10 basis points from -0.4 percent to -0.5 percent record low.

The European Central Bank now expects interest rates to remain at their current levels until inflation rate “robustly converge to a level sufficiently close to but below 2% within its projection horizon, and such convergence has been persistent.”

Jens Weidmann, Bundesbank President, however, didn’t see the reason for such excessive stimulus package.

According to Weidmann, one of the most vocal critics of the apex bank’s monetary policy, it is now clear that rates will stay low for a long time, adding that his goal is to avoid unnecessary delay in rate hikes.

Meanwhile, a UK government spokeswoman told Reuters on Friday that the EU and British Brexit talks will resume next week.

“The UK has presented some ideas on an all-island SPS (animals and food products) solution. Further discussions between teams will take place next week,” the spokeswoman said.