ECB to resume sovereign bond buybacks by November

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ECB to resume sovereign bond buybacks by November

ECB (European Central Bank) President, Mario Draghi, had expressed strong intents to resume buybacks of sovereign bonds as early as by November in order to revive euro zone’s slowing economy amid a bundle of disdainful data indicating more than half of the bloc had been struggling to shrug off technical recessions, a report of Der Spiegel, a German weekly news magazine published in Hamburg, had revealed on Friday, the 19th of July 2019, citing sources from the European Central Bank.

Besides, according to the German newspaper, current ECB Chair, Draghi, widely dubbed as the dovish Draghi, whose mandates would expire by October 31st, had expressed robust optimisms over his initiatives, adding that the measures would ramp up local investments and consumer spending, however, the comments were met with sheer criticism as expected.

Meanwhile, since an interest rate cut was ruled out, as it would open up an unconventional doorway towards negative interest rate that would likely to ratchet up pressure on the slowing economy further amid 82 percent of bloc’s money residing idly in the banks, ECB officials had agreed to provide additional support for the economy in context of an “increased uncertainty” on global trade.

Nonetheless, multiple analysts including world’s largest asset manager, BlackRock’s CEO had harshly criticized ECB monetary policy easing, citing ECB lacked room to ease policy further amid a zero-percent interest rate and its loose policy easing measures likes of euro zone bond buybacks would unlikely to proffer growth.