ECB President Christine Lagarde told reporters at a press conference in Frankfurt, Germany that the decision to lower the deposit facility rate – the rate through which we steer the monetary policy stance – is based on the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.

This has been ECB's fifth rate cut since last June, and two or three more cuts are expected this year.

With the deposit rate at 2.75%, the ECB is approaching its "neutral" range of 1.75% to 2.5%, which is said to neither boost nor slow economic activities, local experts say.