European Central Bank announces fresh stimulus in response to coronavirus outbreak

• The European Central Bank kept its interest rates on hold but launched a fresh stimulus package in response to coronavirus.
• The central bank launched an additional 120 billion euros of bond buying until the end of this year.
• Investors will be watching ECB president Christine Lagarde's press conference at 13:30 GMT.

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The European Central Bank on Thursday launched a fresh stimulus package in a response to the growing risk of coronavirus.

In addition to its monthly asset purchase program of 20 billion euros ($22.5 billion), the ECB announced a temporary asset purchase plan of 120 billion euros until the end of this year.

"A temporary envelope of additional net asset purchases of €120 billion will be added until the end of the year, ensuring a strong contribution from the private sector purchase programmes. In combination with the existing asset purchase programme (APP), this will support favourable financing conditions for the real economy in times of heightened uncertainty," the ECB said in its statement.

Quantitative easing is when central banks purchase governments bonds in large scale in order to stimulate lending and push inflation higher in the economy.

The decision from the ECB follows emergency rate cuts of 50 basis points from the US Federal Reserve and the Bank of England.

Earlier this week, ECB president Christine Lagarde warned that the outbreak of coronavirus could spark an economic downturn similar to the global financial crisis of 2008. In a call with EU leaders on Tuesday, Lagarde urged them to take action in order to curb the economic effects of coronavirus, a source with knowledge told Bloomberg.

Investors will be watching Lagarde's press conference at 13:30 GMT.