The ECB held a monetary policy board meeting in Ljubljana, Slovenia, on the 17th local time and said it had lowered its key interest rate by 0.25 percentage points, from 3.65% to 3.40% per annum and from 3.50% to 3.25% per annum.
The marginal loan rate was also reduced from 3.90% to 3.65% per year.
For the first time in 13 years the ECB has cut interest rates in a row, Reuters interpreted the ECB as shifting its focus from holding prices to protecting economic growth.
The ECB cut all three policy rates by a quarter of a percentage point in June, shifting monetary policy for the first time in a year and 11 months, before freezing rates at its July meeting.
Initially, the market forecast that the ECB would cut interest rates once every quarter by the end of next year.
Since then, however, interest rate cuts have accelerated as euro zone inflation has picked up faster than expected and fears of a contraction in the economy have grown.
The euro zone September consumer price growth announced today was 1.7%, lower from a preliminary 1.8%.
It is the first time in three years and five months that euro zone inflation has fallen below the monetary authority target of 2.0% since April 2021.
"All the information that has come in over the past five weeks points downward," ECB President Christine Lagarde told a news conference, but added: "We are still looking at a soft landing."
Experts are weighing that the ECB will also cut rates at its last monetary policy meeting of the year in December as signs of economic contraction continue in several eurozone countries.
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