ECB cuts key rate to 1%

Slashing the key rates for the seventh time in as many months, the European Central Bank (ECB) today reduced the interest rate to one per cent.

The ECB, which sets the rates for the 16 nations sharing the euro currency, is exploring ways to cope with the global financial crisis, which has pushed many European countries deep into recession.

"The interest rate on the main refinancing operations of the Eurosystem will be decreased by 25 basis points to one per cent," ECB said in a statement today.

In October 2008, the rate stood at 4.25 per cent. Since then, the bank has slashed the rate seven times.

Further, the interest rate on the marginal lending facility would be reduced by 50 basis points to 1.75 per cent. Both rates would be effective from May 13.

The ECB has left the interest rate on the deposit facility unchanged at 25 basis points.

Earlier in the day, UK's apex bank -- The Bank of England -- left the key interest rate unchanged at 50 basis points.

The bank's Monetary Policy Committee "voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5 per cent", the apex bank said in a separate statement.

To boost the nation's sagging economy, the apex bank would increase the size of its asset purchase programme by 50 billion pounds to 125 billion pounds.