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ECB Discussed Negative-Rate Exemption, Bigger Cut in March

  • Exemption scheme for negative rates rejected due to complexity
  • ECB comments in accounts of March 10 monetary-policy meeting
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European Central Bank officials in March discussed a larger rate cut and exempting some deposits from negative rates amid growing concern about the inflation outlook in the euro area.

“A sharper rate cut could be considered, together with indications that the effective lower bound would have been reached for all practical purposes,” according to the accounts of the March 10 Governing Council meeting published on Thursday. Officials also discussed the possibility of exempting some bank reserves from the negative deposit rate but decided against it, partly due to its complexity.