RPT-ECB's Coeure - Central banks have tools even when rates at zero

LJUBLJANA Fri Jan 31, 2014 10:08am EST

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LJUBLJANA Jan 31 (Reuters) - Central banks have tools available to lift low inflation back to target even when interest rates are at zero, European Central Bank Executive Board member Benoit Coeure said on Friday.

Euro zone annual inflation slowed to 0.7 percent in January, well below the ECB's target of just below 2 percent, data showed on Friday.

The ECB's main interest rate is at 0.25 percent and the central bank has assured it still has room to cut rates, if warranted.

"There are monetary policy instruments that could be used in the event of downward risks to medium-term price stability, even if the nominal interest rate is constrained by the zero lower bound," Coeure said in the text of a speech to be given at Ljubljana University.

He did not specify the tools that could be used. The ECB meets on Thursday. (Reporting by Zoran Radosavljevic, writing by Sakari Suoninen; Editing by Toby Chopra)