The ECB also expanded its asset purchase program from 60 billion euros (66.81 billion US dollars) to 80 billion euros (89.08 billion dollars) per month, beginning in April.
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The STOXX Europe 600 Basic Resources index also climbed 2.2 percent higher after prices of major industrial metals rose sharply.
The ECB’s initial announcement of reductions in key rates and a boost to quantitative-easing (QE) bond buying was more than expected, sending the euro down to almost US$1.08, after having held close to US$1.10 since the beginning of the week. “The ECB pulled out all the stops and told the market that they don’t ‘anticipate more rate cuts.’ In other words they’re done”.
“The ECB package can not and will not solve the economic problems in Europe”, said Ralph Brinkhaus, deputy parliamentary floor leader of Merkel’s conservative bloc.
“They are a guide for financial speculation”.
“The amount that banks can borrow is linked to the amount of loans they have”, Draghi said.
Gold futures on the COMEX division of the New York Mercantile Exchange rose on Thursday as investors were concerned about the weakness in European markets in the wake of euro stimulus. On Thursday, markets took less than 90 minutes to go from being overwhelmed by the extent of the latest measures to shrugging off the moves aimed at reviving expansion and price growth in the euro area.
FRANKFURT, March 10 The European Central Bank will offer to pay banks that borrow money from it in what is the most radical scheme anywhere in the world to boost lending to consumers and companies.
“While Draghi’s comments were perhaps too heavy-handed and unhelpful, it’s likely markets will ultimately settle down and see the ECB’s move as very positive”, said Shane Oliver, head of investment strategy at AMP Capital, noting the overall easing was more than investors expected. “In the case of the instruments we are now using, this is particularly true of negative interest rates on our deposit facility”, Constancio wrote, referring to the charge on banks for hoarding cash at the ECB.
The MSCI Asia Pacific Index slipped 0.4% as of 9:37 am Tokyo time, headed for a 1% drop in the week as Japan’s Topix index declined 0.8%. In another post, he said the European Central Bank policy moves were “actually more fiscal than monetary” and marked the end of the line for rates moving below zero.
The broader All Ordinaries index was down 2.3 points, or 0.04 per cent, at 5,208.6 points.
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Oil prices came off three-month highs on rising stockpiles and as an OPEC meeting aimed at freezing output appeared unlikely without Iran’s participation. The greenback slid to a 16-month low below 111 yen last month amid a global bout of risk aversion.
