The European Central Bank has cut two key interest rates, one of them into negative territory -a highly unusual step that underlines the urgency of its efforts to keep the eurozone economy from sliding into crippling deflation.
The monetary authority for the 18 countries that share the euro on Thursday added that it would later in the day announce further measures to make sure its low interest rates benefit the economy as much as possible.
It reduced its main interest rate, the refinancing rate, from a record low of 0.25 percent to 0.15 percent. More drastically, it also cut the rate it pays on money deposited by banks from zero to minus
The ECB is trying to spur a weak recovery and raise inflation, which is dangerously low at 0.5 percent. Weak inflation has raised fears the eurozone may slide into outright deflation, a sustained drop in prices that can choke off growth as consumers and companies delay spending in hopes of bargains. The eurozone economy grew only 0.2 percent in the first quarter, and unemployment remains high at 11.7 percent.
Investors were waiting for a post-decision news conference by ECB President Mario Draghi to see what the new measures will be to get credit moving to businesses.
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