[FRANKFURT] The European Central Bank cut interest rates on Thursday to boost the eurozone economy, surprising financial markets by dropping its main refinancing rate to zero from 0.05 per cent.

It also expanded its quantitative easing asset-buying programme to 80 billion euros a month from 60 billion euros and cut its deposit rate to -0.4 per cent from -0.3 per cent, charging banks more to keep their money with the ECB.

The moves - which knocked the euro down 1 per cent against the dollar - reflect the ECB's struggle with falling inflation expectations and worries about ultra low price growth.

Attention now turns to ECB President Mario Draghi's 1330 GMT news conference.

REUTERS