MNI BRIEF: ECB Cuts By 25BP, Communications Unchanged
MNI (LONDON) - The European Central Bank cut its benchmark deposit rate by 25bps to 3.25% on Thursday, trimming the refi rate and the marginal lending rate by the same amount to 3.40% and 3.65% respectively. (see MNI ECB WATCH: ECB Likely To Cut, Remain Data Dependent )
The decison was widely expected, with many policymakers expressing a preference for lower rates ahead of the October meeting (see MNI INTERVIEW: ECB Should Cut In October, Says Kazaks). However, despite the seemingly dovish shift on the Governing Council, overall language surrounding future decisions was little changed -- future rate moves will remain data dependent, decided meeting-by-meeting. (see MNI SOURCES: ECB To Keep Meeting-By-Meeting Even After Cut)
According to the policy statement, the GC is "determined to ensure that inflation returns to its 2% medium-term target in a timely manner. It will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim," with a "data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction."