On 8 October, the ECB announced a 50 basis point reduction (to 3.75%) in its key policy rate – the interest rate on the main refinancing operation – in a move coordinated with five other  8  BIS Review 6/2009  major central banks (Bank of Canada, Bank of England, the Federal Reserve, Sveriges Riksbank and Swiss National Bank).
The decision to ease monetary conditions in the euro area (and, more generally, at the global level) was warranted by the previous moderation in inflationary pressures and inflationary expectations, partly reflecting weakening economic activity, a marked decline in the prices of energy and other commodities and increasing downside risks to future economic growth, in turn reflecting to a large extent the intensification and broadening of the financial turmoil.