ECB meeting: ECB slashes deposit rate, extends QE to help raise inflation

By FXStreet FXStreet (Mumbai) – European Central Bank chief Mario Draghi admitted persistent low inflation rate reflects sizeable economic slack. The declining core inflation in the bloc called for further easing measures and Draghi had hinted that that more monetary easing was in the pipeline. In the last one week leading to today’s meeting, markets had speculated on the different easing tools that the central bank would choose to inject more funds into the system.

ECB slashes deposit rate further into the negative territory

Living up to its commitment to do all it could to pull inflation up “as quickly as possible, the central bank decided to slash deposit rate by 10 basis points. The deposit rate now at -0.30 per cent moves further into the negative territory and hopefully will help raise stubbornly low inflation. Banks will be charged more for parking cash with the ECB from 9th December on wards when the decision comes into effect. Today’s rate cut highlight the central bank’s intention to further weaken the euro exchange rate and thereby support economic growth through exports.

The central bank however left both the refi as well as the marginal lending facility rate unchanged. The interest rate on the main …read more

Source:: FX Street