ECB Cuts Main Interest Rate to 0.5 Percent

"The cut in interest rates should contribute to support a recovery later in the year," ECB President Draghi said at a news conference. Photo by EPA/BGNES

The European Central Bank (ECB) has cut its main interest rate to a new record low of 0.5%.

The decision for the cut to 0.50% from 0.75% was announced in Bratislava at a sitting of the 23-member governing council of the ECB, according to reports of the CNN.

The ECB's cut was the first in 10 months and the fourth since ECB President Mario Draghi assumed office in November 2011.

As well as cutting its main refinancing rate from 0.75% to 0.5%, the ECB voted to leave its deposit rate at 0.0%.

The marginal lending facility was also cut to 1% from 1.5%.

ECB President Mario Draghi told a news conference that "weak economic sentiment has extended into the spring of this year."

He noted that inflation expectations in the euro area continues to be firmly anchored.

"The cut in interest rates should contribute to support a recovery later in the year," the ECB President added.

"Overall labor market conditions remain weak ... weak economic sentiment has extended into the spring of this year. The cut in interest rates should contribute to support a recovery later in the year," Draghi stated.

On April 30, Eurostat data showed that inflation in the eurozone had slowed to 1.2% in April, while the unemployment rate had surged to 12.1% in March.

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