MNI BRIEF: ECB Cuts Rates, Scraps Restrictive Pledge
MNI (LONDON) - The European Central Bank cuts its three key interest rates by 25 basis points on Thursday, sending the benchmark Deposit Rate to 3.0%, the lowest in over two years. (See MNI ECB WATCH: ECB To Cut, Likely To Change Language )
The Governing Council said it is "determined to ensure that inflation stabilises sustainably at its 2% medium-term target. It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.” It dropped a previous commitment to “keep policy rates sufficiently restrictive for as long as necessary” to achieve its inflation target. (see MNI SOURCES: ECB Closer To Dropping "Restrictive" Language)
With French markets still seeing signs of volatility in recent week, the ECB again said the Transmission Protection Instrument is available to counter disorderly market dynamics that pose a serious threat to the transmission of monetary policy. (see MNI SOURCES: ECB Heads For 25BP Cut; Risks From Trump, Germany )
ECB chief economist Philip Lane will speak at an MNI Webcast event on Dec 19. Register here.