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By Francesco Canepa
BRUSSELS, March 31 It is "legitimate" for the
European Central Bank to review its pledge to keep rates at
record low levels or even cut them, but it is too early for now
to have that conversation, ECB board member Benoit Coeure said
Coeure's comments mark the first time a dovish member of the
ECB's Executive Board and a close ally of President Mario Draghi
opened the door to the prospect of gradually ending an era of
ultra-low interest rates, if growth and inflation continue to
With the threat of deflation now disappeared, Coeure said
the ECB will "at some point" have to discuss whether it still
needs to charge banks 0.4 percent on their excess cash, an
extreme policy tool known as a negative Deposit Facility Rate
"That's not a discussion that we’ve had so far but it’s a
legitimate discussion," Coeure said at an event organised by
think-tank Bruegel. "At some point we’ll have a discussion
whether such a low level of the DFR is still needed."
Inflation in the euro zone has rebounded since late last
year but it markedly slowed down again in March, data showed on
This vindicates the ECB's cautious stance despite growing
calls from countries such as Germany to end its easy policy or
aggressive bond purchases and negative interest rates.
Coeure said the ECB's guidance, which includes buying bonds
until December and only raising rates well after that was still
But he cautioned that the order of the moves may change
along with economic conditions.
"Ultimately, also the choice of sequencing of policy
instruments will be the outcome of our regular assessment,"
He also stressed that he was not in favour of letting
inflation, currently at 1.5 percent, rise above the ECB's target
of just under 2 percent just because it had been under that
level for years.
(Reporting By Francesco Canepa; Editing by Julia Glover)