Short-term interest rates set to remain at “very low levels” says ECB board member

The European Central Bank will keep short-term interest rates at “very low levels” for the immediate future, according to board member Benoit Coeure.

Speaking to French radio station BFM Business this morning, the central banker said the ECB was still missing its inflation target – which is to be below, but close to, two per cent over the medium term.

“Inflation is not quite where we would like it to be,” he said.

As a result, he added: “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.”

The ECB’s council of governors had not discussed a scenario under which a first rate hike in the euro zone could take place in mid-2019, Coeure added.

Last week the euro fell against against a basket of currencies after the ECB kept interest rates on hold and took a step towards ending quantitative easing.

His comments come ahead of a number of planned speeches by ECB officials this week, including President Mario Draghi, ECB’s chief economist Peter Praet and Cœure himself.