March 12, 2018 / 7:32 AM / a year ago

ECB's Coeure sees short term interest rates at "very low levels"

FILE PHOTO: Benoit Coeure, board member of the European Central Bank (ECB), is photographed during an interview with Reuters journalists at the ECB headquarters in Frankfurt, Germany, May 17, 2017. REUTERS/Kai Pfaffenbach/File Photo

PARIS (Reuters) - Short term interest rates are to remain at “very low levels” in the euro zone, European Central Bank (ECB) board member Benoit Coeure said on Monday.

“It is very clear to us that short term interest rates, the ones that are controlled by the central bank, will remain at very low levels, far beyond the horizon of our asset purchases,” Coeure told French radio station BFM Business.

Last week, the ECB dropped a long-standing pledge to increase its bond buying if needed, taking another small step in weaning the euro zone economy off its protracted program of monetary stimulus.

Coeure said the exact timeframe and modalities of an exit from that program of stimulus had not been yet debated.

“Inflation is not quite where we would like it to be,” he added, regarding the ECB’s inflation target.

The ECB has a target of inflation being below, but close to, 2 percent over the medium term.

Coeure also said the council of governors did not discuss a scenario under which a first rate hike in the euro zone could take place in mid-2019.

Reporting by Sudip Kar-Gupta and Matthias Blamont; Editing by Leigh Thomas

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