European Central Bank cuts interest rate to 0%

The European Central Bank (ECB) has cut its benchmark interest rate to 0% from 0.05% as part of a package of measures intended to boost the flagging eurozone economy.

That was the first time ever that the ECB has lowered the benchmark interest rate to zero, AFP reports.

The ECB has also decided to further cut the bank deposit rate from minus 0.30% in December to minus 0.40%, said the bank's spokesperson. This means that banks are now to pay more in order to deposit their funds with the Central Bank. As part of today's package of measures, the ECB has also expanded its quantitative easing program from EUR 60 billion to EUR 80 billion a month. The scheme will now include the purchase of corporate bonds as well as government debt.

This set of measures, including the decision to cut the benchmark interest rate, are more drastic than investors expected.

European Central Bank Germany - Evropska Centralna Banka

European Central Bank

ECB

benchmark interest rate of ECB

bank deposit rate

eurozone recovery measures

Central Bank

purchase of corporate bonds

quantitative easing

government debt

zero interest rate