Euro tumbles as policy makers bring forward bond purchases
The European Central Bank (ECB) will buy extra bonds during May and June to make up for the amount it believes it will be unable to purchase in July and August, an ECB official said yesterday.
Analysts have noted that July and August can be quiet months for the bond market, and it may be difficult for the ECB to meet its target €60bn of bond purchases per month – a policy launched to revive the currency bloc’s falling inflation and weak economic growth.
“The Eurosystem is taking this [seasonal difference] into account in the implementation of its expanded asset purchase programme by moderately frontloading its purchase activity in May and June,” said ECB executive board member Benoit Coeure.
The euro fell 1.5 per cent against the dollar after his comments.
Coeure said that if further stimulus was required, the ECB would not lower its headline interest rate any further below its current level of 0.05 per cent.