The European Central Bank cut its key interest rate Thursday by a quarter percentage point to a new all-time low of 0.5 per cent, a move aimed at giving the eurozone economy a push as it struggles to get out of a recession.
ECB officials, including its president, Mario Draghi, have said the bank is now looking at methods that go beyond the benchmark interest rate to get more credit to small and medium enterprises.
Here is a look at what the ECB and other central banks have done to support growth and make borrowing easier.
— BANK OF JAPAN
Interest rates: Has kept its benchmark interest rate at zero to 0.1 per cent.
Bond buying: Has said it would double its purchases of government bonds, a step that will flood the economy with money. The action will also drive down the value of the yen. A cheaper yen will make Japanese goods less costly for Americans and other foreigners. But it will make U.S. and other exports comparatively more expensive in Japan.
— FEDERAL RESERVE
Interest rates: Has kept its benchmark short-term rate at a record low near zero since December 2008 and has said it plans to keep it there at least until unemployment falls to 6.5 per cent from its current 7.7 per cent.
Bond buying: It is buying $85 billion a month in bonds indefinitely to try to keep long-term borrowing costs down. It said Wednesday it might vary the size of its monthly purchases depending on whether the job market improves.
— EUROPEAN CENTRAL BANK
Interest rates: Has cut its benchmark rate to 0.50 per cent, a record low.
Bond buying: In September last year, the ECB offered to buy unlimited amounts of government bonds to help lower borrowing costs for countries struggling to manage their debts. No bonds have been bought, but the offer has reduced bond-market borrowing costs for indebted countries. And any purchases would not involve increasing the supply of money in the economy, because the bank would withdraw an equivalent amount by means such as taking more deposits.
The ECB has held off on buying bonds as a way of pumping new money into the economy. It says such a step would be difficult for it to carry out among 17 member countries.
Earlier, the ECB gave banks more than 1 trillion euros ($1.3 trillion) in low-interest loans lasting up to three years.
— BANK OF ENGLAND
Interest rates: Has kept its benchmark rate at a record low of 0.5 per cent since 2009.
Bond buying: Has announced an extension of its scheme to buy more government bonds from financial institutions, hoping the banks will use the extra cash to lend to businesses and households.
— RESERVE BANK OF AUSTRALIA
Interest rates: In December, Australia’s central bank cut its benchmark interest rate by a quarter percentage point to its lowest level since the global financial crisis erupted five years ago. The Reserve Bank of Australia’s decision to cut the rate to 3 per cent was its fourth rate cut of 2012.