PARIS (Reuters) - Low inflation means the European Central Bank plans to keep interest rates at current low levels or may even cut them further, ECB Executive Board member Benoit Coeure said on Saturday.
With euro zone inflation running at 0.7 percent, well below its target of just under 2 percent, a raft of ECB speakers have said this week that the bank is open to taking fresh measures after a surprise rate cut to a record low of 0.25 percent earlier this month.
“We have said that in the view of the subdued outlook for inflation we expect interest rates to remain at current or lower levels for an extended period of time,” Coeure told a conference in Paris.
ECB President Mario Draghi on Thursday poured cold water on the idea the bank was actively considering moving deposit rates into negative territory, but on Friday stressed the need to keep interest rates low.
The ECB’s chief economist Peter Praet said on Friday the euro zone faced deflationary pressures
Coeure said the measures the ECB was taking were in line with its inflation mandate and that this mandate did not stop it from acting to support the economy in times of crisis.
Reporting by Ingrid Melander; Editing by Alexandria Sage and Pravin Char