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ECB ready to ‘take appropriate measures’ on coronavirus

ECB ready to ‘take appropriate measures’ on coronavirus

The European Central Bank is ready to take "appropriate and targeted measures" to fight the impact of the coronavirus outbreak, it said on Monday.

The European Central Bank on Monday (Mar 2) said it stood ready to take action as concerns grow about the impact of the coronavirus epidemic on the global economy.

The fast spreading outbreak has roiled financial markets and disrupted international travel and supply chains, fuelling fears that it will take a toll on economic growth this year.

“The coronavirus outbreak is a fast developing situation, which creates risks for the economic outlook and the functioning of financial markets,” ECB chief Christine Lagarde said in a statement.

“We stand ready to take appropriate and targeted measures as necessary and commensurate with the underlying risks.”

The ECB’s governing council is due to hold its next monetary policy meeting in Frankfurt on Mar 12.

Some observers are sceptical that there is much the central bank can do given its already ultra-loose monetary policy.

The bank has in recent years rolled out unprecedented stimulus measures to bolster the eurozone economy and drive up stubbornly low inflation.

It has set interest rates at record low levels, offered cheap loans to banks and bought up more than 2.6 trillion euros ($2.9 billion) in corporate and government bonds.

Before the outbreak, the ECB had been widely expected to leave its monetary policy unchanged for a while.

Analysts have now suggested it could opt to cut its bank deposit rate deeper into negative territory, making it more expensive for banks to park their cash with the ECB in a bid to encourage lending, or it could ramp up its monthly bond purchases.

- Source: News websites