UPDATE 1-ECB's Praet to recommend cutting main rate to 0.15 pct -Spiegel

Sun May 18, 2014 4:09pm EDT

(Updates with no comment from ECB)

BERLIN May 18 (Reuters) - European Central Bank Executive Board member Peter Praet will recommend that the bank cut its main refinancing rate to a record low 0.15 percent from 0.25 percent at its policy meeting on June 5, according to the German magazine Der Spiegel.

Praet is also expected to recommend the introduction of a negative rate on bank deposits for the first time, Der Spiegel reported on Sunday, without citing a source.

The ECB's deposit rate is now zero. Cutting it would effectively charge banks to park their money at the ECB overnight, which might be an incentive for them to lend the money instead.

Praet holds the economics portfolio on the ECB's executive board. He routinely makes a presentation and policy recommendation at the beginning of Governing Council meetings, which then form the basis for discussion.

The ECB declined to comment.

Last week Reuters reported that the ECB was preparing a package of policy options for its June meeting, including cuts in all interest rates.

Five people familiar with the measures being prepared described plans involving a potential rate cut, including the ECB's deposit rate going negative for the first time, along with measures targeting small and mid-size companies. (Reporting by Alexandra Hudson; Editing by Larry King)