ECB cuts interest rate to 0% in hopes of stimulating economic activity

The European Central Bank has cut several interest rates at its governing council meeting in Frankfurt today.

It is in the hopes of stimulating economic activity across the eurozone by making it unattractive for banks to keep money on reserve in the ECB.

In theory, banks would then be forced into using the funds for lending, but a report last week says this has not been completely successful so far.

The interest rate on the main refinancing operations of the Eurosystem will be decreased by 5 basis points to 0% from 0.05%.

It also reduced the interest rate on deposits held by banks at the central bank to minus 0.4% from minus 0.3%.

It also expanded its monthly bond-buying programme to €80bn a month from the previous €60bn.