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EU: ECB Announces More Stimulus, Cuts Deposit Rate by 10 Basis Points

1 MIN READSep 12, 2019 | 13:29 GMT

What Happened: The European Central Bank (ECB) decided Sept. 12 to launch a new round of stimulus for the eurozone and reduce its deposit rate from -0.4 to -0.5 percent. The bank also announced that it would start a new round of quantitative easing and buy 20 billion euros (roughly $22 billion) in bonds per month starting in November.

Why It Matters: The ECB's decision, which comes amid slowing economic growth and low inflation in the eurozone, fell mostly within market expectations, although rumors suggest that some central bankers from Northern Europe resisted additional stimulus measures.

Background: The ECB had already pledged to keep interest rates low until mid-2020 amid low inflation in the eurozone, which remains around 1 percent. The bank last cut interest rates in 2016 before pausing its quantitative easing program in December 2018.

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