Frankfurt (dpa)
Posted on: Tuesday, June 28, 2022 – 8:16 PM | Last update: Tuesday, June 28, 2022 – 8:16 PM
European Central Bank President Christine Lagarde said on Tuesday that the bank intends to activate the bond-buying mechanism, which it considers the first line of defense once morest any potential crisis in the bond market, from next Friday.
And Bloomberg reported that being flexible in deciding how to allocate the investments of the 1.7 trillion euro ($1.8 trillion) bond purchase program portfolio during the emerging Corona virus pandemic aims to curb any unwanted chaos in the government bond market with the trend to raise European interest rates above their levels. Standard low to rein in inflation.
On the other hand, Lagarde confirmed plans to raise the interest rate by a quarter point during the month of July, but said that policy makers are ready to do more than that to address record inflation.
At the annual meeting of central bank officials in Sintra, Portugal, Lagarde gave assurances that the new anti-crisis mechanism, which has not yet been announced, would not stand in the way of overcoming the fastest rise in consumer prices since the adoption of the euro single currency.
The meeting of central bank officials comes at a difficult time, as they prepare to raise interest rates for the first time in a decade.
On the other hand, there are growing concerns that a possible cut in Russian energy supplies will trigger an economic recession in Europe.
Officials held an emergency meeting this month, following the rise in Italian bond yields, as they decided to speed up work on a new mechanism to counter such turmoil.
