At todays monthly meeting of the ECB it was announced that the headline interest rate will be cut to zero from the current low rate of 0.05%.
The last cut in the ECB rate was in Sept 2014 when it fell from 0.15% to 0.05%.
This cut initially caused a decline in the value of the Euro – but it recovered soon after and ended up higher than before the rate cut.
A weaker Euro is what the ECB would have wanted – since a weaker euro will help increase inflation and enable the central bank to meet their price stability target. (Back in Nov 2015 the Euro was worth just 70p)
If you are going to be exchanging large amounts of Euros and or Sterling in the near future – you should read our article about getting the Best Exchange Rates
Holders of tracker mortgages in Ireland won’t see much change in repayments because the ECB rate was already very low at just 0.05% .
Most tracker mortgage holders will see a cut of around €3 a month in repayments.
The ECB president also said that interest rates are going to stay at their current record lows, or lower, for a long time.
In addition the ECB have cut their deposit rate by another 0.1% to take it to 0.4% . (This is the rate offered to financial institutions)
The ECB will also increase its monthly purchases under the Quantitative Easing programme to €80bn starting in April.