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ECB Scales Back Interest Rate Hike, again

Vilnius, Jun 6, 2019, SPA — The European Central Bank (ECB) pushed back the timing of its first post-crisis interest rate hike again on Thursday and said it would continue paying banks for lending in its latest effort to revive a slowing euro zone economy.
ECB President Mario Draghi said policymakers had addressed the ECB’s readiness to act in case of “adverse contingency” and several had raised the possibility in Thursday’s discussion of further interest rate cuts or restarting asset purchases.
According to Reuters, the moves, bolder than analysts had expected until only a few weeks ago, come as a trade war between the United States and China overshadows the global economy and especially export-oriented euro zone countries such as Germany.
Draghi told a news conference following the policy announcement that the decisions taken had been unanimous.
Responding to rapidly deteriorating inflation expectations, the ECB pledged to keep its interest rates at their current, record-low level at least through the first half of 2020, instead of the end of this year as it had said only in March.
Explaining that decision, Draghi said risks to the economy were tilted to the downside.

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