Asset Purchase Program

The Asset Purchase Program (APP) is a monetary policy initiative often used by central banks, like the European Central Bank, to boost the economy. It involves the central bank buying financial assets, such as government or corporate bonds, from the market. This increases money supply, lowers interest rates, and encourages lending and investment. By purchasing these assets, the central bank aims to stimulate economic activity, support financial stability, and combat low inflation. Essentially, it’s a tool to help the economy grow when traditional policies, like lowering interest rates, are not enough.