The European Central Bank has moved into unchartered territory.
As expected, it cut its main lending rate, similar to the RBA’s cash rate, to a new low of 0.15 per cent, while its deposit rate was slashed to minus 0.1 per cent.
The effectively means, it will now charge institutions to deposit or leave money at its vaults, in an attempt to get them to pull that cash out, and use it in other parts of the economy, to stimulate growth.
"It really gets down to the confidence level of the ordinary Europeans, whether they embrace the super low interest rates and start borrowing and to get activity starting to move," CommSec Chief Economist, Craig James told SBS.
Still, the move was enough to bump up the Australian dollar.
"There is the expectation that if the European economy starts to lift, the US starts to lift, and if we see stronger growth out of China that will mean greater demand for our key resources here in Australia, whether its iron ore, whether its coal like agricultural resources like beef or wool," Craig James said.
