Ecb euroREUTERS/Kai PfaffenbachA man uses his mobile phone to take a picture of the euro sculpture outside the head quarters of the European Central Bank (ECB) in Frankfurt, November 5, 2013.

The ECB cut rates in November.

Only three economists expected this.

The central bank elected to lower its benchmark refinancing rate to 0.25% from 0.50%, while the rate on the marginal lending facility was reduced to 0.75% from 1.00%.

The euro is plunging. Right now, it’s trading 1.1% lower against the dollar.

Meanwhile, European stock markets are surging after spending most of the morning in the red. The Spanish IBEX 35 is leading the way, up 1.4%.

Follow the ongoing press conference and Q&A with ECB president Mario Draghi LIVE »

Below is the full text of the release:


7 November 2013 – Monetary policy decisions

At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:

  1. The interest rate on the main refinancing operations of the Eurosystem will be decreased by 25 basis points to 0.25%, starting from the operation to be settled on 13 November 2013.

  2. The interest rate on the marginal lending facility will be decreased by 25 basis points to 0.75%, with effect from 13 November 2013.

  3. The interest rate on the deposit facility will remain unchanged at 0.00%.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.

With a persistently appreciating euro and the release of data last week revealing that eurozone consumer price inflation plunged to 0.7% year over year in October from 1.1% in September, a few notable firms (BofA Merrill Lynch, UBS, and RBS) predicted the ECB would cut the refi rate to 0.25% today, while a few others (Morgan Stanley and Société Générale, to name two) thought it would do so at its December meeting.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.