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The ECB cut its deposit rate to a record low
-0.5% from -0.4% and will restart bond purchases of 20 billion
euros a month from November, it said in a statement.
With inflation falling, Germany skirting a recession and a
global trade war sapping domestic confidence, the ECB had all
but promised more support to the economy and the only question
was how extensive stimulus would be.
"The Governing Council expects (bond purchases) to run for as
long as necessary to reinforce the accommodative impact of its
policy rates, and to end shortly before it starts raising the
key ECB interest rates," the ECB said in a regular policy
statement.
The ECB also eased the terms of its long term loans to banks and
introduced a tiered deposit rate to help banks.
Economists polled by Reuters expected a 10 basis point deposit
rate cut, a tiered deposit rate to support banks, bond buys of
30 billion euros a month from October and a fresh promise to
keep rates low for longer.
"The Governing Council now expects the key ECB interest rates to
remain at their present or lower levels until it has seen the
inflation outlook robustly converge to a level sufficiently
close to, but below, 2% within its projection horizon, and such
convergence has been consistently reflected in underlying
inflation dynamics," the ECB said.
Attention now turns to ECB President Mario Draghi's 1230 GMT
news conference, at which he will also present fresh growth and
inflation projections.
(Reporting by Balazs Koranyi, Francesco Canepa and Michelle
Martin; Editing by Catherine Evans)
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