The European Central Bank (ECB) is cutting its key deposit rate by 10 basis points to minus 0.30% with effect from 9 December and extending its quantitative easing (QE) programme in several ways, following the meeting of its governing council today.

While the size of the asset-buying programme is to be kept at its current pace of €60bn a month, rather than being expanded as some market participants had hoped, the central bank announced several measures to effectively increase it.

The deposit rate was the only key rate to be changed, with the interest rate on the ECB’s main refinancing operations, as well as the rate on the marginal lending facility, remaining unchanged at 0.05% and 0.30%, respectively.

Mario Draghi, president of the ECB, told a press conference: “The monthly purchases of €60bn under the asset purchase programme are now intended to run until the end of March 2017 or beyond if necessary, or, in any case, until the governing council sees a sustained adjustment in the path of inflation consistent with its aim of achieving inflation rates below but close to 2% over the medium term.”

A third decision was made to reinvest the principal payments on the securities purchased under the asset purchase programme as they matured for as long as necessary.

“This will contribute to favourable liquidity conditions and an appropriate monetary policy stance,” Draghi said, adding that technical details would be given later.

The central banker made a fourth policy decision to admit regional and local government bonds into the QE programme.

“We decided to include euro-denominated marketable debt instruments issued by regional and local governments located in the euro area in the list of assets eligible for purchase by the respective national central banks,” he said.

The bank also decided to continue its main refinancing operations and the three-month longer-term refinancing operations as fixed rate tender procedures with full allotment for as long as necessary and at least until the end of the reserve maintenance period of 2017.

“Our new measures,” Draghi said, “will ensure accommodative financial conditions and further strengthen the substantial easing impact of the measures taken since June 2014, which have had significant positive effects on financing conditions, on credit and on the real economy.”

European stocks rose in early trading today on hopes the ECB would cut rates and announce an increase in the pace of QE.

The rate cut was in line with money market expectations.

Markets are also keeping a keen eye on US rates, which could be changed by the Federal Reserve at its committee meeting on 15-16 December.