ECB ready for negative deposit rate - Bonnici

Reuters

FRANKFURT (Reuters) - The European Central Bank is ready to start charging banks for their deposits at the central bank, if needed, Governing Council member Josef Bonnici said, but he warned such a move could have negative consequences.

"We always said that there are some factors, some complications which one needs to keep track of. It may have some consequences which may have to be taken into account, but it is possible to go negative and we are prepared to go negative. There are pluses and minuses to this negative rate," he told MNI in an interview published on Monday.

Bonnici also told the news agency that cutting the main refinancing rate would have less impact since rates are already low.

Turning to inflation, Bonnici, who also heads the central bank of Malta, said he was "not sure whether the current low rate is such a big concern".

"At this stage, our expectation is that inflation will probably remain in a reasonable area between 1 percent and 2 percent," he said.

(Reporting by Sakari Suoninen and Eva Taylor)

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