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ECB on hold as it ponders next move on pandemic fallout

European Union

The European Central Bank is expected on Thursday to leave its emergency monetary plan on hold as it lays the groundwork for reassessing the programme’s measures aimed curbing the economic fallout from the coronavirus crisis.

Analysts see the ECB as saying it is maintaining its 1.85-trillion-euro (2.2-trillion-dollar) asset purchasing stimulus scheme through to March 2022 and leaving its interest rates at historic lows, including holding its benchmark refinancing rate at zero.

Indeed, this week’s meeting of the Frankfurt-based bank’s 25-member governing council is likely to set the stage for a key meeting in June when ECB President Christine Lagarde will unveil a new round of eurozone economic growth and inflation projections.

“In June, the eurozone 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.

Up until now, the eurozone 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.

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However, the Belgian and Dutch central bank chiefs – Pierre Wunsch and Klaas Knot, respectively – are already leading moves for the ECB to consider steps for exiting the anti-pandemic measures.

June’s staff projections should point to a post-pandemic economic recovery taking hold in the 19-member eurozone during the second half of the year.

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