The European Central Bank's
governing council, at a meeting last month where it launched a
string of anti-deflation measures, did not rule out further
interest rate cuts in future, which may be necessary in the
event of economic shocks, according to the minutes of the March
10 meeting made public Thursday.
Another mooted measure was to exempt some banks from the
negative deposit rates, but it was eventually decided that this
was not necessary.
The ECB on March 10 cut its refinancing rate to a historic
low of 0% and expanded its quantitative easing (QE) or massive
bond-buying programme.
The new package of six monetary stimulus measures aimed "to
further ease financial conditions, stimulate credit, and
strengthen" the recovery, ECB President Mario Draghi said.
In the new package of four Targeted Longer-Term Refinancing
Operations (TLTROs), Draghi said, the more banks lend the lower
the rate will be, starting from the zero of the main refinancing
rate.
The ECB raised the purchase limit of each individual bond
issue in its QE programme from 35% to 50%, he added.
The ECB expects rates to remain at their current record
lows "for a long time, well beyond the time frame of the (QE)
purchases" being made, Draghi said in a clear message - expected
by markets - on the forward guidance of interest rates.
The ECB also cut eurozone inflation forecasts, from 1% to
0.1% this year and from 1.6% to 1.3% in 2017.
Inflation is expected to reach 1.6% in 2018, Draghi said.
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