FRANKFURT, Dec. 12 (Xinhua) -- The European Central Bank (ECB) decided on Thursday to cut its key interest rates by 25 basis points at its rate-setting meeting.
With this adjustment, the interest rates for the deposit facility, the main refinancing operation, and the marginal lending facility are now set at 3 percent, 3.15 percent and 3.4 percent respectively, the bank said in a statement.
The decision to lower interest rates was "based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission," the statement said. This marks the ECB's fourth rate cut this year, reducing rates from their historical highs.
The ECB confirmed that inflation is expected to reach its 2-percent target in the medium term "on a sustained basis," citing measures of underlying inflation.
In a notable shift, the ECB abandoned its previous rhetoric about keeping policy rates restrictive "as long as necessary," while reiterating its commitment to a data-dependent approach for determining future monetary policy.
"The Governing Council is determined to ensure that inflation stabilises sustainably at its 2 percent medium-term target," the bank said in its statement. ■
