Coeure sees no reason for ‘spectacular’ ECB action

Euro zone inflation is not undershooting the European Central Bank’s target of just below 2 percent so much that it should use its heaviest artillery to try to boost prices, ECB Executive Board member Benoit Coeure said. Coeure told a journalist club on Monday night that the ECB was ready to act, but that the euro zone was not edging towards a dangerous fall in prices. The ECB cut its interest rates to a record low of 0.25 percent last month after October inflation fell to an alarmingly low 0.7 percent, increasing fears the currency bloc would see a spiral of persistently falling prices. “Inflation prospects are consistent with our objective, so I don’t see need to use spectacular measures, such as U.S.-style large-scale asset purchases,” Coeure said, adding that the ECB can buy government bonds as long as it does not do so for the purpose of financing governments.

    

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