(MENAFN- AFP) Eurozone interest rates, which the European Central Bank cut last week to new all-time lows, could still fall further, ECB executive board member Joerg Asmussen said on Tuesday.
"Depending on how inflation develops, we're still not at the end of what is possible on the interest rate front," Asmussen told the regional daily Neue Osnabruecker Zeitung in an interview to be published on Wednesday.
In a surprise move last week, the ECB shaved a quarter of a percentage point off its central "refi" refinancing rate to a new historic low of 0.25 percent.
It left another key rate, the deposit rate, unchanged at zero to avoid taking into negative territory for the first time.
While the ECB has cautioned in the past that a negative deposit rate -- whereby banks would have to pay the central bank to park money at the ECB -- could have unforeseen negative consequences, the bank's president Mario Draghi has repeatedly insisted that it is technically ready for such a move.
Asmussen also appeared wary.
"I'd be very careful about taking such a step as it would have a strong signalling effect, but I wouldn't rule it out in principle," Asmussen said.
He conceded that not all members of the ECB's governing council had been in favour of the new rate cut, but Asmussen defended the decision.
"I wouldn't question the need to act so as to safeguard our price stability target," he said.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.