European Central Bank (ECB) executive board member Peter Praet will recommend the bank cut its main refinancing rate to a record low of 0.15 per cent from 0.25 per cent at its next policy meeting on June 5th, according to German magazine Der Spiegel.

The bank also wants to introduce a negative rate on bank deposits for the first time of -0.1 per cent as recommended by Praet, it was reported.

Praet holds the economics portfolio on the ECB’s executive board and routinely makes a presentation and policy recommendation at the beginning of governing council meetings which then forms the basis for discussion.

The ECB’s deposit rate is at zero at the moment and cutting it lower would mean effectively charging banks to park their money at the ECB overnight, which might be an incentive for them to lend the money out instead. The ECB was not available for comment.

Last week Reuters reported that the ECB was preparing a package of policy options for its June meeting, including cuts in all interest rates. Five people familiar with the measures being prepared outlined plans involving a potential rate cut, including the ECB’s deposit rate going negative for the first time.