The European Central Bank has cut interest rates and expanded its asset purchase programme in a bid to stimulate growth, exceeding market expectations.
At the hotly-anticipated meeting, the ECB announced a 10 basis point cut to the deposit facility, effective from 16 March. The rate is now in negative territory, at -0.4 per cent.
The ECB has also expanded its asset purchase programme by €20bn to €80bn, starting from April.
In addition, the ECB has released a new series of four targeted longer-term refinancing operations, each with a maturity of four years. These will be launched in June.
The cut to the deposit rate was broadly in line with market expectations, although fell short of some who expected a 20 basis point cut.
However, the overall package of returns is more than most were expecting.
The announcement comes as commentators warned that ECB president Mario Draghi risked disappointing the market and damaging his reputation if the changes to monetary policy today underwhelmed market expectations.