The European Central Bank is set to shift to a negative deposit rate for the first time in its history, German newspaper Der Spiegel has reported.
Leaked documents seen by the paper have revealed a plan to set a rate which will introduce an effective tariff of -0.1% on all funds deposited with the bank. This means banks will have to pay to leave money on deposit with the ECB instead of earning interest, in a move designed to encourage lending.
The central bank also plans to slash its main refinancing rate from 0.25% to a record low of 0.15%, the paper reports.
European GDP figures published last week showed growth of 0.4% in Q1, compared to 0.5% in the previous quarter, while the euro remains high. In the previous ECB announcement, president Mario Draghi hinted the central bank was considering looser monetary policy.
According to Der Spiegel, however, the central bank will not undertake further bond buying, with a move to full quantitative easing postponed for the time being.
The ECB announcement is expected on 5 June.
