Some rate-setters sought a deeper cut in the already negative deposit rate during the December policy session, minutes of the meeting released by the European Central Bank showed Thursday.
“Some members expressed a preference for a 20 basis point cut in the deposit facility rate at the current meeting, mainly with a view to strengthening the easing impact of this measure and reflecting the view that, to date, no material negative side effects on bank margins and financial stability had emerged,” the minutes of the December 3 meeting, which the ECB calls “account” said.
The bank cut its deposit facility rate by 10 basis points to a record low -0.30 percent. The size of the reduction was at the lower end of the 10-20 basis points cut economists had forecast.
“A cut in the deposit facility rate of 10 basis points was seen as unlikely to trigger material negative side effects and was also seen as having the advantage of leaving some room for further downward adjustments, should the need arise,” the report said.
The Governing Council, which met in Frankfurt, left the main refinancing rate, or the refi, unchanged at record low 0.05 percent and the marginal lending facility rate at 0.30 percent.
The ECB also decided to extend its EUR 1.1 trillion asset purchase programme until March 2017, “or beyond, if necessary.
“There was broad support for shifting the intended end date of the purchases from September 2016 to March 2017,” the minutes said.
Suggestions to extend asset purchases beyond March 2017 and expanding the monthly volume of purchases from EUR 60 billion were also made, the minutes said.
“There was broad agreement that such measures would not be warranted at this juncture, while a reassessment could be made in future,” the report added.
The material has been provided by InstaForex Company – www.instaforex.com