September 23rd, 2019

European Central Bank unveils new help for economy

By The Associated Press on September 12, 2019.

FRANKFURT – The European Central Bank is launching a new round of monetary stimulus to support economic growth in the face of uncertainties like the U.S.-China trade conflict and Brexit.

The central bank for the 19 countries that use the euro said Thursday it would cut the rate on deposits it takes from banks to minus 0.5% from minus 0.4%. That is a penalty rate that pushes banks to lend excess cash.

It also said it would purchase 20 billion euros ($22 billion) a month in government and corporate bonds for as long as necessary. The purchases pump newly created money into the financial system to lower borrowing costs and raise inflation.

The bank also extended a promise to keep rates at record lows for as long as necessary.

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