(From Article)
BRATISLAVA — The European Central Bank (ECB) cut interest rates for the first time in 10 months yesterday, promising to provide as much liquidity as euro-zone banks needed and to help smaller companies get access to credit.
The ECB lowered its main interest rate by 25 basis points to a record low of 0.5 per cent in response to a drop in euro-zone inflation well below its target level, and rising unemployment.
The cut was widely expected but few economists expected it to make a decisive difference.
Acknowledging that, the ECB said it would prime banks with as much liquidity as they need until at least July next year, and look at ways to boost lending to smaller companies.
“Weak economic sentiment has extended into the spring of this year,” ECB President Mario Draghi said.
“Our monetary policy stance will remain accommodative for as long as needed.” He stuck with the ECB’s forecast that economic recovery will take hold later in the year, but highlighted “downside risks”. The ECB would “monitor very closely” all incoming evidence, Mr Draghi said. REUTERS
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