ECB cuts rates for the first time since 2016 in stimulus push

The European Central Bank today announced a new controversial stimulus package to sustain the eurozones slowing economy.

In a U-turn from its previous decisions, the governing council announced it will cut the deposit rate by 0.1 percentage points to –0.5 percent and it will restart a €20 billion monthly asset purchase program from November.

The rate cut is less than the markets had expected. The interest rate on borrowings will remain unchanged.

Outgoing President Mario Draghi was reportedly the packages biggest sponsor but faced opposition by Bundesbank President Jens Weidmann, Klaas Knot, the president of the Dutch central bank, and their French counterpart François Villeroy de Galhau.

The policymakers believed the current economic situation did not warrant such a stimulus push, including a restart of unconventional monetary policies known as quantitative eRead More – Source