In its third rate cut of the year, the Governing Council of the European Central Bank (ECB) decided Thursday to lower three key interest rates by 25 basis points, or 0.25 percentage points.
Effective April 23, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 2.25, 2.40 and 2.65 percent, respectively, according to a press release.
The ECB’s deposit facility rate is the interest rate at which commercial banks can deposit their money at the central bank.
If the deposit rate is high, banks prefer to deposit their money with the central bank, as they earn a better return.If the rate is low or negative, banks will look for alternatives and are more likely to lend out their money instead.
Read more: ERR.EE
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