ECB keeps cheap money taps open amid virus ‘uncertainty’

ECB keeps cheap money taps open amid virus ‘uncertainty’

FRANKFURT: European Central Bank chief Christine Lagarde warned of growing economic "uncertainty" caused by the fast-spreading Delta variant of the coronavirus, as the bank kept its vast stimulus for the eurozone firmly in place. "The euro area economy is rebounding strongly," Lagarde said. "But the pandemic continues to cast a shadow, especially as the Delta variant constitutes a growing source of uncertainty."

The highly contagious variant "” which has forced renewed restrictions in several countries "” could dampen the post-lockdown recovery "in services, especially in tourism and hospitality," she added. Lagarde said the ECB would show "patience" in helping the 19-nation currency club through the health crisis, signaling that rates would stay lower for longer. Thursday's meeting of the ECB's 25-member governing council was the first since the bank unveiled a new inflation target of two percent, ditching the previous goal of "close to, but below two percent".

In the "forward guidance" statement released after the meeting, closely scrutinised by markets for hints on future policy moves, the ECB said rates would stay at their current record low and even negative levels until inflation is seen "durably" reaching the new target. Governors also made no tweaks to their 1.85-trillion-euro ($2.2 trillion) pandemic