ECB cuts key rate

European Central Bank has cut its benchmark interest rate to a record low to prop up the region's sluggish economy. Board  meeting in Bratislava, Slovakia, agreed to lower its main refinancing rate by 0.25 percentage points to 0.5 percent. The reduction is the first since July last year.

Many European countries are in dire fiscal straits and present forecasts suggest that even Germany is facing diminishing prospects. Germany  is the region's leading economy.

ECB President Mario Draghi said at a news conference that weak economic sentiment extended into the spring of this year. Further stressed the bank's readiness to take further steps to ease credit if needed.
Economists say the ECB's latest move is unlikely to stimulate the European economy. They say interest rates in the zone have already been lowered to almost zero.

ECB further decided to consult with other public organizations in the eurozone about possible new measures it may take. These include extending the lending of three-month, low-interest loans to financial institutions. Steps to expand loans to businesses are also being considered.