Frankfurt: The European Central Bank (ECB) meeting in Frankfurt on Thursday saw the bank cut the refi rate, that is, the bank’s key lending rate to zero and lowered the rate on cash parked overnight by banks to minus 0.4 from minus 0.3. By doing this it has not only expanded the size but also increased the scope of its asset-buying program.
The 25-member Governing Council also went ahead and announced that it would expand its monthly bond purchases from the current 60 billion euros to 80 billion euros in the coming financial year.
Along with this increase the Central Bank also plans to launch a new series of longer-term loans to banks with maturities of four years.
The markets brightened following this news. The European stocks jumped by more than 2%, while the U.S. stocks moved higher. The euro dropped more than 1% against the U.S. dollar.
Earlier, before the ECB meeting the U.S. dollar had recorded a fall on Wednesday.