Investing.com – Minutes from the European Central Bank’s (ECB) March policy meeting released Thursday revealed that a “large majority” of members supported the unprecedented easing measures taken by the euro area monetary authority, although there were differing opinions on the components to be included in the package with the consideration that an additional cut to the deposit rate could be contemplated in the future.
The historical policy move included a cut in the interest rates on the Eurosystem’s MROs and on the marginal lending facility of 5 basis points to 0.00% and 0.25% respectively, a cut in the interest rate on the deposit facility of 10 basis points to -0.40%, an expansion of the monthly purchases under the APP to €80 billion, starting in April, the inclusion of investment-grade euro-denominated bonds issued by non-bank corporations established in the euro area in the list of assets eligible for regular purchases, and the launch of a new series of four targeted longer-term refinancing operations, each with a maturity of four years, starting in June 2016.
The minutes indicated that there was a broad agreement among the members that a strong policy response was needed, although there were differing opinions on what to include in the package.
"Members generally expressed confidence in the effectiveness of the envisaged policy package, even though nuanced views were put forward on the relative merits of the various elements of the package," the minutes showed.
Regarding the rate reduction, the minutes revealed that, overall, members broadly supported a further cut in the deposit facility rate.
“With respect to the envisaged size of such a cut, the importance of communication and the link to the formulation of forward guidance was underlined,” the minutes indicated.
“On the one hand, a sharper rate cut could be considered, together with indications that the effective lower bound would have been reached for all practical purposes. On the other hand, the proposed limited rate cut could be judged as appropriate for now, given the current assessment, while it would also not rule out the possibility and prospect of further cuts if warranted by the outlook for price stability”, the document added.
The euro was largely unchanged after the release. EUR/USD was trading at 1.1401 from around 1.1400 ahead of the release of the data, while EUR/GBP was at 0.8082 from 0.8074 earlier.
Meanwhile, European stock markets continued to move broadly lower. The EURO STOXX 50 lost 0.94%, Germany's DAX traded down 0.54%, France’s CAC 40 shed 0.48%, while London’s FTSE 100 slipped 0.29%.