The European Central Bank expects to remain in crisis-fighting mode until into 2021 to combat an "unprecedented decline" in the euro zone's economy caused by the coronavirus pandemic, its President Christine Lagarde said on Thursday.
Ciara Lee reports
Holding back on any big policy move, the European Central Bank kept much of its remaining powder dry on Thursday (April 30).
It's already gobbling up bonds at a record pace, just weeks after unveiling its biggest stimulus scheme to date.
The Central Bank said it would buy 1.1 trillion euros of debt this year.
It's kept the door open to even more as the euro zone economy is shrinking faster than already bleak expectations.
The bank will lower interest rates on its long term loans for banks to as little as minus 1 percent.
And will also launch a new loan scheme.
Following the policy meeting, ECB Chief Christine Lagarde said she expects the bank to remain in crisis-fighting mode until into 2021 to combat the "unprecedented decline".
(SOUNDBITE) (English) EUROPEAN CENTRAL BANK PRESIDENT CHRISTINE LAGARDE, SAYING: "The governing council and we discussed this over the last two days, is more determined than ever to strengthen its commitment to ensure supportive financial conditions across all sectors and countries so that they can absorb this unprecedented shock that we are experiencing." With much of Europe locked down indefinitely, the 19-country currency bloc's economy could shrink by 10% this year.
Governments are borrowing record amounts to keep firms afloat until restrictions are lifted.
The ECB is unlikely to stay on the sidelines for long, as it is on track to exhaust its current bond purchase quota by autumn.
And jittery financial markets are demanding a further show of commitment.
Pressure may now turn to Europe's political leaders, who have so far fumbled a fiscal response.
That's left the ECB in a familiar role as the currency union's chief crisis fighter.