- Mario Draghi, ECB President
European Central Bank President Mario Draghi unveiled bold easing measures, slashing interest rates and expanding asset purchases, in a bid to revive the Euro zone's struggling economy. The Frankfurt-based central bank cut the interest rate on the main refinancing operations by five basis points to zero, slashed deposit rate by 10 basis points to –0.4% and trimmed the marginal lending rate, used by banks to borrow from the ECB overnight, to 0.25% from 0.3%. On top of that, the ECB raised monthly asset purchases to 80 billion euros from 60 billion euros. Mr Draghi said that the central bank's stimulus measures are indented to last until March 2017 or longer if necessary. Moreover, the ECB chief implied interest rates would remain very low for at least another year, but played down expectations they could be slashed even further.
ECB President said that the central bank's staff had revised downwards its inflation and growth expectations, estimating that even with extra stimulus, price growth will not reach its target for years to come and growth will weaken. The ECB predicts the annual GDP growth of 1.4% this year, down from 1.7% in the previous outlook in December. Also, Draghi cited a host of risks to economic growth from stumbling emerging economies, volatile financial markets and the snail pace of structural reforms.
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