The European Central Bank Thursday cut all of its main interest rates, including a surprise reduction in the main refinancing rate to zero percent from 0.05 percent.
The ECB also reduced the interest rate on deposits held by banks at the central bank to minus 0.4 percent from minus 0.03 percent.
In addition, the central bank also expanded its monthly bond-buying program to 80 billion euros a month from the previous 60 billion.
The moves, which knocked the euro down 1 percent against the dollar, reflect the ECB’s struggle with falling inflation expectations and worries about ultra low price growth.
Inflation in the single currency bloc has been below the ECB’s nearly 2 percent target for three years. Analysts had predicted that the Governing Council will choose a package of modest measures.