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June 18, 2021

ECB drops lending rates to record low

The European Central Bank cut its benchmark interest rate to its lowest level ever on Thursday in perhaps its most aggressive move yet to unblock the flow of credit and prevent further deterioration of the euro zone crisis, euronews.com informs. The ECB cut its benchmark rate to 0.75 percent from 1 percent, which was once regarded as the lower bound on the official rate. Economists and political leaders are likely to welcome the cut, which was expected by most analysts, as offering welcome relief from strains in the euro zone. But it also carries risks. With interest rates now close to zero, the bank and its president, Mario Draghi, will have a dwindling selection of conventional monetary policy tools they can use to combat the crisis.

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