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ECB Cuts Interest Rate, Launches Stimulus Plan
As expected, the European Central Bank has taken steps to add liquidity to the eurozone's financial system and stimulate the region's economy.
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As expected, the European Central Bank has taken steps to add liquidity to the eurozone's financial system and stimulate the region's economy.
The ECB lowered its benchmark lending rate to 0.05% and said it will begin buying private debt products from banks.
Economists had urged the central bank to take action as eurozone inflation neared zero and threatened to dip into a destructive deflationary spiral.
The ECB now forecasts eurozone inflation will be 0.6% this year and 1.1% in 2016, well below its target 2% rate. The bank also has downwardly revised its outlook for the region's economic growth to 0.9% this year and 1.6% in 2015.
ECB President Mario Draghi says the bank's stimulus measures strike a balance between the desire of some council members to do less and those that urged a more aggressive quantitative easing plan similar to those adopted by the Bank of England and U.S. Federal Reserve.
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