7 Apr 2014
ECB's Nowotny suggests further rate cuts are a possibility
FXStreet (Łódź) - ECB Governing Council member Ewald Nowotny said on Monday that the deflation threat in the Eurozone should recede along with the strengthening of the economy in the area, so there was no immediate need for the central bank to step in.
He signaled however that further rate cuts were possible and added that there was no sequencing to ECB's action and that all available measures, including the unconventional ones, would be taken into consideration.
"It does not mean that steps are to be taken immediately, rather that one prepares for all eventualities," Nowotny said.
Among the unconventional measures, Nowotny's preference are the purchases of asset-backed securities as they are “close to the market” and could "positively influence" the loan provision to small- and medium-size firms.
The EUR/USD strengthened to 1.3714 on the news, while EURJPY rose to 141.50.
He signaled however that further rate cuts were possible and added that there was no sequencing to ECB's action and that all available measures, including the unconventional ones, would be taken into consideration.
"It does not mean that steps are to be taken immediately, rather that one prepares for all eventualities," Nowotny said.
Among the unconventional measures, Nowotny's preference are the purchases of asset-backed securities as they are “close to the market” and could "positively influence" the loan provision to small- and medium-size firms.
The EUR/USD strengthened to 1.3714 on the news, while EURJPY rose to 141.50.