The European Central Bank (ECB) lowered its key policy rates by 0.25 percentage points on the 17th (local time). This marks the second consecutive cut following last month and the third reduction this year.
On this day, the ECB held a monetary policy meeting and decided to reduce the deposit rate from 3.5% to 3.25%, a 0.25 percentage point cut. The main refinancing rate was lowered from 3.65% to 3.4%, and the marginal lending rate was cut from 3.9% to 3.65%. This is the first time since December 2011 that the ECB has cut rates in two consecutive monetary policy meetings.
This outcome was considered expected. Initially, the market anticipated that the ECB would adjust the pace of easing by cutting rates once per quarter until the end of next year, but with Eurozone inflation falling faster than expected recently, there was growing speculation that the ECB would proceed with consecutive cuts at this month's meeting. The Eurozone's September Consumer Price Index (CPI) inflation rate, released on the day, was 1.7%, falling below the ECB's inflation target of 2% for the first time in over three years.
The market is currently awaiting the upcoming press conference by ECB President Christine Lagarde.
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