What can the ECB do now?
Central bank is facing coronavirus shock with limited room for further policy measures
After the Fed reduced rates by 50 basis points to respond to the coronavirus – its first emergency rate cut since the financial crisis – the focus is now on the European Central Bank.
But the ECB has scant room for manoeuvre. While the US federal funds rate stands now at 1–1.25%, the deposit rate in the eurozone is already at a record low -0.5%. Additionally, in September 2019, the ECB resumed asset purchases and reduced the rate at which banks can access targeted longer-term refinancing
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