This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
OK
Dublin: 4 °C Monday 30 March, 2020
Advertisement

ECB announces negative rate in bid to fight deflation

The rate at which the European Central Bank pays commercial banks for depositing their unused cash has been reduced from zero per cent to minus 0.10 per cent.

Image: financial symbols via Shutterstock

THE EUROPEAN CENTRAL Bank today entered into uncharted territory in its battle against deflation, taking one of its key interest rates into negative territory for the first time.

The ECB said in a statement that it is lowering all three of its key interest rates, which have been on hold at record lows all this year.

The bank’s decision-making governing council voted to lower the central refinancing rate to 0.15 percent from 0.25 per cent previously.

The interest rate on the marginal lending facility was trimmed to 0.40 per cent from 0.75 per cent.

And the deposit rate, the rate at which the central bank pays commercial banks for depositing their unused cash, was reduced from zero per cent to minus 0.10 per cent.

The moves had been widely anticipated by the financial markets after leading ECB officials, including president Mario Draghi, repeatedly hinted at such measures in recent weeks.

Draghi is scheduled to explain the bank’s reasoning at a news conference later, and is also expected to unveil additional policy measures to kick-start credit in the eurozone.

Read: Here’s how many houses the banks have repossessed so far this year

Read: Dublin pub and a Kerry peninsula make Lonely Planet’s best hidden gems list

  • Share on Facebook
  • Email this article
  •  

About the author:

Read next:

COMMENTS (42)