2- In its meeting on July, 2020 European Central Bank did not change the policy rate but made the following announcement: “The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics

The above case is an example of unconventional monetray policy used by the Central bank which is used due to the risk of deflation in the economy. This is an example of Asset Purchase Program of the Central bank or Quantitative Easing measures of the Central bank.It involves purchase of securities by the Central bank to flood the market with liquidity which increases money supply in the economy and also increases aggregate demand in the economy. As aggregate demand in the economy increases, the inflation rate increases and risk of deflation is low in the economy. This Unconventional monetary policy measure will help in controlling the level of inflation in the economy.