The Wall Street Journal is reporting that “the European Central Bank cut its main interest rate to a historic low of 0.75 percent Thursday, as expected, offering a degree of relief to the euro-zone’s faltering economy amid signs that inflationary pressures are fading.” This marks the ECB’s first rate reduction since December and takes rates below the 1 percent low previously hit in the wake of Lehman Brothers’ 2008 collapse. “In a move that could help thaw frozen interbank markets,” the Journal notes, “the central bank also cut its overnight deposit and lending rates by 0.25 percentage point each, to 0 percent and 1.50 percent, respectively. Cutting the deposit rate could encourage banks to lend out excess funds overnight rather than stashing them at the ECB.”
ECB cuts rate to record low
The European Central Bank cut its main interest rate to 0.75 percent, its first rate reduction since December.
July 6, 2012