ECB cuts rates again, rebids bond-buying
The European Central Bank said on Thursday that it would cut its interest rate for deposits by 10 basis points to minus 0.5% and plans to trim it even lower to improve inflation outlook.
The announcement also included the printing of money again, saying that it would buy $22 Billion in bonds along with other financial assets per month which will commence in November.
Moreover, ECB also said that it would do necessary steps to protect banks from the repercussions of imposing negative rates.
The announcement affected the European market as the euro dropped 0.5% while results on benchmark German and Italian bonds declined and European stocks rose.
The launch of the “tiering” program to negate the effects of negative rates on banks could also be yielding its own effect which is to keep the interest rate even lower and retain it over a period of time.
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