Today the European Central Bank extended its quantitative easing program by 6 months or beyond while cutting its overnight deposit rate further into negative territory by 10 basis points to -0.30 percent beginning on December 9, 2015 to penalize banks for parking money at the ECB and encourage lending in the overall economy.
The ECB is undertaking a €60bn per month quantitative easing program of government bonds that was extended today until March 2017 from its earlier end point of September 2016.
The interest rate on the main refinancing operations and the interest rate on the marginal lending facility were left unchanged at 0.05 percent and 0.30 percent.
“The latest staff projections indicate continued downside risks to the inflation outlook” Draghi said.
The ECB lowered its inflation forecast for 2017 to 1.6 percent which remains below its target of just below 2 percent.
Inflation in the 19 member euro currency zone increased just 0.1 percent in November.
Core inflation in the euro area dropped in November to 0.9 percent from 1.1 percent in October.
The ECB raised its 2015 growth forecast to 1.5 percent from 1.4 percent. The forecast for 2016 remains the same at 1.7 percent but its forecast for 2017 was increased to 1.9 percent from 1.8 percent.