The central bank, meeting in Bratislava, cut its benchmark interest rate to 0.5 percent from 0.75 percent, which was already a record low. It was the first change in interest rates since July 2012 and the bank’s fourth cut since Mario Draghi took over as its president in November 2011.
The central bank will continue providing unlimited loans to banksat the benchmark interest rate “as long as needed” and at least until mid-2014, Mr. Draghi said at a news conference after the announcement.
Even at its new low of 0.5 percent, the European Central Bank’sbenchmark rate remainshigher than the 0.25 percent rate the FederalReserve has had in place since late 2008. On Wednesday, the Fedsaid it would maintain its stimulus campaign , buying $85 billion a month in Treasury and mortgage-backed securities. The Fed added that it would consider adjusting its efforts to spur growth and reduce unemployment in the United States.
A cut by the European Central Bank was widelyexpected after a series of economic indicators in recent weeks foreshadowing an extended downturn in the euro zone, with recession even threatening the seemingly unstoppable German economy. On Thursday, two stalwarts of corporate Germany, BMW and Siemens, warned of lower profits for 2013 because of the downturn in European markets.
