ECB refrains from rate cut, steps up liquidity measures amid COVID-19 concerns

The European Central Bank (ECB) on Thursday decided to leave key interest rates unchanged but rolled out a comprehensive package of monetary policy measures to ensure liquidity support amid COVID-19 concerns.

The stimulus package includes additional longer-term repo operations, known as LTROs, to provide immediate liquidity support to the euro area financial system, according to a statement released by the ECB.

More favorable terms will be applied to the targeted longer-term refinancing operations, or TLTRO III, to support bank lending to those affected most by the spread of the coronavirus, in particular small and medium-sized enterprises, the central bank said.

A temporary envelope of additional net asset purchases of 120 billion euros (135 billion U.S. dollars) will be added until the end of the year, the ECB said, which will, along with the existing asset purchase program, "support favorable financing conditions for the real economy in times of heightened uncertainty."

The eurozone base interest rate will remain at 0.00 percent, with the marginal lending rate and deposit rate remaining at 0.25 percent and minus 0.50 percent, respectively, the ECB said, missing market expectation about a rate cut following U.S. Fed and Bank of England.