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ECB cuts benchmark rates to 0.05% from 0.15%

In a bid to tackle the slowdown in Eurozone, the European Central Bank (ECB) has cut benchmark interest rate to 0.05 percent from 0.15 percent.

The News International Team

In a bid to tackle the slowdown in Eurozone, the European Central Bank (ECB) has cut benchmark interest rate to 0.05 percent from 0.15 percent. The central bank has also cut marginal lending rate to 0.3 percent, while deposit rates have been slashed to -0.2 percent from -0.1 percent.

Addressing a press conference, ECB president Mario Draghi said the decision has been taken to add to the range of recent policy measures.

Announcing purchase of asset-backed securities, Draghi said the ECB is committed to take additional measure to achieve 2 percent inflation levels. He also announced purchase of covered bonds. The ECB’s interventions in these programs will begin in October 2014.

In an earlier interview to CNBC-TV18, Manish Singh, Chief Strategist & Head of Investments at Crossbridge Capital, said that he had expected Draghi to be under a lot of pressure to come up with additional stimulus measures.

“I do not think asset-backed securities (ABS) purchase alone is going to be enough and that is primarily because of the size of the SME ABS market that he has talked about,” Singh said.

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