The ECB slashes rates for the first time since March 2016
- 2 months ago
Following its monetary policy meeting in Frankfurt, the ECB announced it is to launch a new package of stimulus for the bloc’s economy as it faces slow growth and low inflation.
The ECB lowered its deposit rate further into negative territory, a first since March 2016 and decided to launch another round of bond-buying, a move which drew immediate retaliation from US President Donald Trump.
“They are trying, and succeeding, in depreciating the euro against the VERY strong dollar, hurting US exports . . . And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!”
The ECB announced it will slash its deposit rate from -0.4% to a record low of -0.5%, alomg with that it will re-ignite its QE program, purchasing €20 billion of bonds on a monthly basis
The ECB released new economic forecasts detailing the reasons behind the cut.
Additionally, the ECB cut its forecast for growth in the 19-member single currency zone this year by 10 basis points to 1.1%, and by 20 bps to 1.2% for 2020 and also lowered its forecast for inflation by 10 bps to 1.2% this year, and by 40 bps 1% next year.
Source: Smart Trend Team