18 Nov 2013
ECB chief economist Praet: Options even with rates at zero
FXstreet.com (Barcelona) - ECB executive board member and chief economist of the central bank Peter Praet reaffirmed the comments made earlier last week, by saying the ECB has options even with interest rates at zero.
According to Praet, in comments cited by the German newspaper Sudduetsche Zeitung: "We have enough room for measures, there is no “last bullet”... once the main interest rate is at zero, one has to deploy quantative measures." Praet added that "this does not have to be a bond programme, it can also be liquidity injections for banks, but we are not at that point."
Praet continued to show a slight stubbornness not to admit that Eurozone is suffering from deflationary pressures, although he did say that depressed prices for a prolonged period is a trend to be avoided due to the damage it may inflict on business activity.
According to Praet, in comments cited by the German newspaper Sudduetsche Zeitung: "We have enough room for measures, there is no “last bullet”... once the main interest rate is at zero, one has to deploy quantative measures." Praet added that "this does not have to be a bond programme, it can also be liquidity injections for banks, but we are not at that point."
Praet continued to show a slight stubbornness not to admit that Eurozone is suffering from deflationary pressures, although he did say that depressed prices for a prolonged period is a trend to be avoided due to the damage it may inflict on business activity.