Following Epic FT Snafu, ECB Cuts Deposit Rate By 10bps To -0.30% As Expected.In what may have been the most shocking ECB announcement in recent history, moments ago the ECB cut its deposits rate by 10 bps to -0.30%, just as expected.
From the ECB press release:
At today’s meeting the Governing Council of the ECB decided that the interest rate on the deposit facility will be decreased by 10 basis points to -0.30%, with effect from 9 December 2015.
The interest rate on the main refinancing operations and the interest rate on the marginal lending facility will remain unchanged at 0.05% and 0.30% respectively.
Further monetary policy measures will be communicated by the President of the ECB at a press conference starting at 14:30 CET today.
But while the rate cut was not unexpected, and was very much in line with consensus, whatshocked the markets is that precisely 9 minutes before the ECB’s official announcement, theFinancial Times, now owned by the Nikkei, reported that instead of a rate cut, the ECB had left its rate unchanged:
Policymakers on the governing council left the deposit rate, which applies to a portion of banks’ reserves parked at central banks across the currency area, at minus 0.2 per cent.
Markets had priced in a cut of between 0.1 and 0.2 percentage points.
The main refinancing rate remained at 0.05 per cent.
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