After the decision by the European Central Bank (ECB) to lower interest rates, European exchanges observed a surge in share prices. Wall Street observed share prices soaring as well.
At the meeting of the Governing Council of the ECB in Frankfurt, it was decided that the rate on the deposit facility would be reduced by 0.25 percentage points to 3.5%. The deposit facility rate is the interest rate at which the Governing Council of the ECB determines the direction of its monetary policy stance.
The Governing Council of the ECB also decided to lower the main refinancing operations rate by 0.6 percentage points to 3.65% and the rate on the marginal lending facility by 0.6 percentage points to 3.9%. The new rates will take effect on the 18th of September.
At the last meeting of the Governing Council of the ECB in July, rates were unchanged, but before that, at its meeting in June, all three rates were reduced by 0.25 percentage points.
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