April 30, 2020

ECB: Additional liquidity and credit support measures while speculations about HY purchases were kept alive

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In Short

At today’s policy meeting the ECB embarked on additional credit support measures. It set up a new so called pandemic emergency longer-term refinancing operations (PELTROs) program. It consists of seven additional refinancing operations starting in May 2020 and maturing in a staggered sequence between July and September 2021 in line with the duration of the collateral easing measures.
ECB: Additional liquidity and credit support measures while speculations about HY purchases were kept alive
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Highlights:

  • Today the ECB launched further credit support and liquidity measures by creating pandemic
    emergency longer-term refinancing operations (PELTROs) without a specific lending target at
    a fixed rate of -0.25 %. It also eased the TLTRO III conditions further to up to -1.0%.
  • President Lagarde emphasized the high uncertainty surrounding the current outlook. That
    said, the ECB expects a gradual recovery as the containment measures are lifted.
  • The inclusion of Fallen Angels bonds in asset purchases was not discussed in the Governing
    Council but speculations about this were kept alive in the Q&A session.
  • Looking ahead, we see a high chance that the ECB will again act in June and extend its
    Pandemic Emergency Purchase Program (PEPP) beyond 2020.

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ECB: ADDITIONAL LIQUIDITY AND CREDIT SUPPORT MEASURES WHILE SPECULATIONS ABOUT HY PURCHASES WERE KEPT ALIVE

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