European bank cuts interest rates

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The European Central Bank has trimmed its benchmark interest rate to 0.05% from a record low of 0.15%.

The step underlines the bank’s determination to keep Europe’s weak recovery from going into reverse and could be accompanied later by further stimulus measures.

The benchmark refinancing rate determines what banks pay the ECB for credit. It influences what banks charge businesses and consumers to borrow. Lower rates stimulate more lending and growth.

The ECB also cut its deposit rate, what banks pay to keep their money at the central bank, to minus 0.2% from minus 0.1%.

Markets are awaiting a news conference by bank head Mario Draghi for clues on what more the bank might do. Mr Draghi has said the bank could buy large quantities of bonds if needed.

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