What is the role of the European Central Bank's monetary policy?

The monetary policy of the European Central Bank involves decisions made by the European Central Bank to affect the cost and availability of the euro in the euro zone economy.

In the Eurozone, the most important decisions of the European Central Bank in this regard are usually related to key interest rates. Any change to the interest rate will affect the interest rate that commercial banks charge customers for loans. In other words, this decision affects consumer spending and business investment. The goal of the European Central Bank's monetary policy is to maintain price stability, that is, to keep inflation below and close to 2% in the medium term. This in turn helps it support the EU’s general economic policies aimed at achieving full employment and economic growth.

When will the European Central Bank adopt an asset purchase plan?

During periods of long-term low inflation and low interest rates, the European Central Bank may also adopt non-standard monetary policy measures, such as an asset purchase plan.