What Is ECB And Why Does It Matter?
The ECB is responsible for administering the monetary policy of the Eurozone. ECB consists of 19 EU member states. According to the Treaty on the Functioning of the European Union, the primary function of the ECB is to maintain price stability across the Euro area by holding monetary policy meetings every six weeks. official website
The council’s decisions are always announced via press release at 1.45 pm CET on the day of the meeting, followed by an ECB press conference at 2.30 pm CET.
How Does The ECB Meeting Affect Traders?
The meeting of the governing council of the ECB is an important date for traders as the council set the official interest rates for the Eurozone. It is incumbent on the National Central Banks of the member state to adopt these interest rates when transacting with commercial banks. The following are the 3 key rates:
- The marginal lending rate: This is the rate for overnight loans
- The deposit rate: This is the rate usually paid on deposits held with NCBs
- The minimum bid rate: This is the rate payable for one-week loans.
In addition to the above rates, the governing council can also inject money directly into the economy when required to help boost spending.
ECB Meeting Schedule 2020
| Month | Date | Financial Event |
| January | 23 | ECB monetary policy meeting |
| March | 12 | ECB monetary policy meeting |
| April | 20 | ECB monetary policy meeting |
| June | 04 | ECB monetary policy meeting |
| July | 16 | ECB monetary policy meeting |
| September | 10 | ECB monetary policy meeting |
| October | 29 | ECB monetary policy meeting |
| December | 10 | ECB monetary policy meeting |