EUROPEAN CENTRAL BANK CUT INTEREST RATES – This is the fourth time this year the ECB has cut rates
The European Central Bank cut interest rates for the fourth time this year and kept the door open to further easing ahead as inflation closes in on its goal and the economy remains weak.
The central bank for the 20 countries that share the euro reduced the rate it pays on bank deposits, which drives financing conditions in the bloc, to 3.0% from 3.25%. It was at a record 4.0% only in June.
It also signalled that further cuts are possible by removing a reference to keeping rates “sufficiently restrictive”, economic jargon for a level of borrowing costs that curbs economic growth.
With the decision, the ECB also cut the rate at which it lends to banks for one week – to 3.15% – and for one day, to 3.40%.
These facilities have barely been used in recent years as the ECB has supplied the banking system with more reserves than it needs via massive bond purchases and long-term loans.
