October 8, 2019 / 10:41 AM / 12 days ago

ECB has not hit floor for interest rate: de Cos

FILE PHOTO: Sign of the European Central Bank (ECB) is seen ahead of a news conference on the outcome of the Governing Council meeting, outside the ECB headquarters in Frankfurt, Germany, March 7, 2019. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) - The European Central Bank has not reached yet the “reversal (interest) rate”, where any more cuts would hurt rather than stimulate the economy, ECB policymaker Pablo Hernández de Cos said on Tuesday.

“Evidence suggests that we have not yet reached the reversal rate but if rates remain negative for long this may end up hampering bank-based monetary transmission, de Cos, who heads the Bank of Spain, said at an ECB conference.

He added that the ECB should adjust its “monetary policy strategy to this challenging environment” and use unconventional tools to complement interest rates.

Reporting By Balazs Korany; Writing by Francesco Canepa

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