FRANKFURT (Reuters) – The European Central Bank approved a fresh stimulus package as expected on Thursday, cutting interest rates and approving a new round of bond purchases to prop up euro zone growth and halt a worrisome drop in inflation expectations. 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… Read full this story
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