The European Central Bank (ECB) lowered its key interest rates by a quarter percentage point, following a series of hikes to get a grip on high inflation.
The ECB cut its deposit rate by 0.25 percentage points to 3.75% after almost nine months at a record high, the bank announced in Frankfurt on Thursday.
It also announced a cut of its refinancing rate by 0.25 percentage points to 4.25%.
The ECB's action ends a rate-hiking cycle that began in July 2022.
Lower interest rates are good news for borrowers, as they make loans more favourable. Savers, on the other hand, will probably receive less interest on their accounts.
As the central bank's decision was expected, many financial institutions have already adjusted their conditions.