ECB cuts benchmark interest rate to record low of zero percentStaff writer ▼ | March 12, 2016
The Governing Council of the European Central Bank (ECB) decided to cut the main refinancing operations rate for the euro area by 5 basis points to record low of zero percent.
Finance in Europe The ECB expanded its monthly purchase of asset by 20 billion euros
Apart from interest rate changes, the ECB decided to expand its monthly purchase of asset by 20 billion euros ($22.28 billion) to 80 billion euros from April.
The assets eligible for purchase under the asset purchase program have also been expanded to include investment grade euro-denominated bonds issued by non-bank corporations established in the euro area.
A new series of four targeted longer-term refinancing operations (TLTRO II), each with a maturity of four years, will be launched, starting in June 2016.
"This comprehensive package will exploit the synergies between the different instruments and has been calibrated to further ease financing conditions, stimulate new credit provision and thereby reinforce the momentum of the euro area's economic recovery and accelerate the return of inflation to levels below, but close to 2 percent," ECB President Mario Draghi said at a press conference following the governing council meeting.
The purchase of asset will run until the end of March 2017 or beyond as necessary. ■