The pandemic is a human tragedy and an economic calamity that is taking lives and livelihoods. In the first half of the year, the global economy faced its biggest decline since the Great Depression. As measures to contain the virus are lifted in many places, economic activity is starting to pick up.
As the main policy interest rate, the interest rate on the deposit facility, was already at zero, the Governing Council needed to introduce new measures to provide additional stimulus to the economy and steer inflation back to levels below, but close to 2%. To this end, the ECB sought to affect the range of interest rates which are relevant for private sector financing conditions.