The European Central Bank has cut its headline interest rate by ten basis points to 0.05%, prompting the euro to slump against the dollar, and said it will begin a long-awaited asset purchase programme in the coming months.
ECB president Mario Draghi (pictured) announced a surprise decision to cut both the main refinancing rate as well as the deposit rate, which has also been reduced by ten basis points to -0.2%. The euro fell sharply by 1% against the US dollar immediately after the news, trading below $1.30 by 13:40 BST. Draghi then announced the ECB will buy asset-backed securities and covered bonds as part of a so-called 'private quantitative easing' package aimed at boosting lending and liquidity. The central bank continues to hold off from more conventional forms of QE such as purchasing sovereign ...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
