The ECB announced a reduction in deposit rates and other measures

The European Central Bank (ECB) cut interest rates today in another bid to boost lending and inflation in the eurozone.

As widely expected by analysts, the ECB reduced the deposit facility rate to -0,30% from -0,20%.

At the same time, the interest rate on Eurosystem major refinancing operations remained unchanged at 0,05% and the marginal lending facility rate remained at 0,30%.

Later, in a press conference, the President of the European Central Bank, Mario Draghi, presented the new five measures decided to boost growth in the eurozone and avoid the risk of deflation (continued inflation).

These measures concern a. the reduction of the deposit interest rate to a record level -0,30%. This is the interest rate offered by the ECB to the banks for the liquidity they deposit in it, b. the extension of the quantitative easing program (purchase of bonds from the secondary market) by six months until March 2017, keeping unchanged the limit of 60 billion euros each month c. the reinvestment of the bonds that are repaid, after their maturity.

These are bonds that are in the ECB portfolio. D. The expansion of the range of bonds that the ECB will buy from the secondary market under the quantitative easing program. Bonds issued by municipalities and Regions will now be included, as well as the full coverage of the banks' liquidity needs at a fixed interest rate for as long as is still necessary.

Source: KYPE

Tags: NewsEurope

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