EU Central Bank drops interest rate to zero
(11 March 2016 – Europe) The European Central Bank (ECB), has cut its official cash rate to zero.
Further, the central bank lowered deposit rates for banks by 10 basis points to -0.4 percent and increased monthly asset buys to €80 billion ($A117.3 billion) from €60 billion.
In a bid to boost lending, consumption and inflation, the regulator said it would commence purchasing corporate debt and launch four new rounds of cheap loan packages.
ECB President Mario Draghi said: "A bank that is very active in granting loans to the real economy can borrow more than a bank that concentrates on other activities,"
"With today's comprehensive package of monetary policy decisions, we are providing substantial monetary stimulus to counteract heightened risks to the ECB's price-stability objective," he told reporters.
"The Governing Council expects key interest rates to remain at the present or lower levels for an extended period of time, and well past the horizon of our net asset purchases.”
"The bottom line ... is that basically more and more the emphasis will shift from rates instruments to other non-conventional instruments," Draghi said.
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