The European Central Bank (ECB) has this week cut its main lending rate to 2%, down from 2.5%. This is the fourth cut in 3 months by the ECB as inflation rate falls further across Europe.
Other monetary decisions taken this week included:
- The interest rate on the marginal lending facility will be set at 3.00%, with effect from 21 January 2009; and
- The interest rate on the deposit facility will be set at 1.00%, with effect from 21 January 2009.
These decisions are in accordance with the ECB Governing Council's decision on 18 December 2008 to restore the width of the corridor of standing facility rates around the interest rate on the main refinancing operation to 200 basis points. For more details click here to read the press statement by the ECB.