"We will look at all the incoming data and stand ready to act if needed"
- Mario Draghi
The European Central Bank during its monthly policy meeting decided to cut the benchmark interest rate to a new record low, as the 17-nation euro region struggles to emerge from recession. On Thursday, policy makers lowered the main refinancing rate to 0.5% from 0.75%, a move widely expected by economists. At the same time, the ECB kept the deposit rate at 0 and reduced the marginal lending rate to 1% from 1.5%. Despite all the actions done by Mario Draghi, there are concerns that low interest rates are not feeding through to those economies most in need of a boost, such as Greece and Spain. During the meeting, Draghi also pledged that the bank may implement negative rates and that another cut in the main rate is possible in case there will be no improvement in the economy.
"We will look at all the incoming data and stand ready to act if needed," Draghi said at a press conference in the Slovakian capital after the ECB cut its key rate by a quarter point to 0.5%. Asked if further action could include taking the deposit rate into negative territory from zero, he said: "We will look at this with an open mind."
"Our monetary policy stance will remain accommodative for as long as is needed," Mario Draghi, the President of the European Central Bank added later.
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