ECB won't use threshold or date-based rate guidance: Constancio

WASHINGTON, March 22 Sat Mar 22, 2014 2:13pm EDT

WASHINGTON, March 22 (Reuters) - The European Central Bank won't tie interest-rate policy to specific economic milestones, an approach the U.S. Federal Reserve used for just over a year and abandoned this week, a top policymaker said on Saturday.

"We think it would not be useful," ECB Vice President Vitor Constancio said on Saturday, without elaborating. He dismissed the idea of giving a time frame for the bank could raise rates, saying the idea is "even worse" than thresholds.

The ECB has other tools, including rate cuts, quantitative easing, negative deposit facility rates and targeted liquidity provision operations, if further policy accommodation is needed, he said.

At its March policy meeting, the ECB left interest rates on hold and introduced no other measures to bolster the fragile euro zone recovery, despite forecasting low inflation for years to come.

Constancio, speaking at a conference sponsored by the Fed, that markets mostly missed that the ECB actually strengthened its forward guidance in its recent meeting, tying its accommodative stance to the closure of slack in the economy.

(Reporting by Ann Saphir)

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