Asmussen Says He’d Be Cautious to Use Negative ECB Rates

European Central Bank Executive Board member Joerg Asmussen said he has reservations about lowering the deposit rate below zero.

“We studied the instrument -- it is, in theory, available,” Asmussen said in response to questions after a speech in New York. “I, personally, would be very, very cautious to use that one, but I would not exclude it.”

The ECB reduced its main refinancing rate by a quarter of a percentage point to 0.25 percent on Nov. 7, while keeping the overnight deposit rate for lenders who park excess cash at the central bank at zero. Policy makers are considering a smaller-than-normal cut in the deposit rate to minus 0.1 percent if more stimulus is needed to ward off deflation, according to two central-bank officials with knowledge of the debate.

“Our monetary policy remains accommodative as long as needed,” Asmussen said. “We will use, if necessary, all instruments to ensure price stability.”

Asmussen said he sees inflation risks as “broadly balanced to both sides.”