“The recovery of the eurozone economy is on the right track,” Lagarde told a news conference after the European Central Bank’s monetary policy meeting. “But the epidemic continues to cast a shadow, especially as the delta variable is an increasing source of uncertainty,” he added.
He pointed out that this variable may hinder the increase in cases, the recovery of “services, especially in tourism and hotels.”
Doubts prompted the European Central Bank to maintain its accommodative monetary policy, without withdrawing support for the economy.
“We must maintain favorable financing conditions for all sectors of the economy at the time of the epidemic. This is necessary in order for the current recovery to become a sustainable expansion and to offset the negative impact of the epidemic on inflation,” the central bank chief said.
At this meeting, the European Central Bank left interest rates unchanged at historical lows and also maintained the extraordinary device it agreed to support the economy, noting that the emergency debt purchase program would continue at least until March 2022.
It was also noted that no increase in rates from historically low levels is expected until inflation expectations sustainably reach the new target set at 2%.
The main refinancing rate remained at zero, while the deposit rate remained at -0.50% and the interest rate applied to the marginal lending facility remained at 0.25%.
“The eurozone economy is recovering well, but the outlook remains dependent on the evolution of the epidemic and progress in vaccination,” Lagarde said.
Read also: The European Central Bank maintains interest rates but adjusts guidance to reflect inflation target
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