The European Central Bank left interest rates unchanged Thursday, but increased its pandemic bond buying program. 

The ECB Pandemic Emergency Purchase Programme has been increased by 600 billion euros to 1.35 billion euros ($1.52 billion). The horizon for net purchases under the PEPP will be extended to at least the end of June 2021. The maturing principal payments from securities purchased under the PEPP will be reinvested until at least the end of 2022.

'We Were Expecting Less Of An Increase' 

The eurozone has suffered immensely due to the coronavirus pandemic.

“While it is no surprise to see interest rates left untouched, we were expecting less of an increase in the pandemic bond buying programme given economies across Europe are beginning to reopen and the worst of the crisis appears to be in the rear-view mirror,” says Hinesh Patel, portfolio manager at Quilter Investors.

The move should be another positive for risky assets at a time when equities have already rallied strongly from their March lows, the portfolio manager says. 

Investors Watch Europe With Interest

Investors will be watching Europe going forward, as valuations remain cheaper versus other regions and investments are under-owned by international investors, says Quilter Investors' Patel. 

“If Christine Lagarde continues to placate big businesses’ borrowing costs like this, we should see a positive return environment for investors as the economy gets going again.”

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