As leaders from the most power nations from around the world meet at the G20 summit to discuss coordinated measures to contain the global slowdown, central banks continue to modify their fiscal policies. In the latest attempt to revive the economy, the European Central Bank cut its benchmark rate by a less-than-expected 25 basis points today, sending its key rate to a fresh record low of 1.25%. On the news, the euro hit an intraday high of $1.3488 versus the dollar, benefiting from the lower than expected rate cut.
The ECB also lowered its deposit rate -a measure of how much is paid to euro-zone banks for cash kept overnight at the central bank- by a quarter point to 0.25%. The rate has become a measure of how much banks charge one another for overnight loans. (Read More)