ECB's Coeure says no need for QE now as euro zone not in deflation

DUBROVNIK, Croatia, June 13 Fri Jun 13, 2014 12:12pm EDT

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DUBROVNIK, Croatia, June 13 (Reuters) - European Central Bank Executive Board member Benoit Coeure said on Friday that there was no need for the ECB to launch large-scale asset purchases, because the euro zone is not in deflation.

Speaking to reporters on the sidelines of an economic conference in Dubrovnik, Coeure said the central bank would now assess the impact of its policy decisions taken last week, which included interest rate cuts and measures to spur lending.

ECB President Mario Draghi said after the policy meeting that the ECB was not done yet and could act again if needed, whetting markets' appetite for more action. The only real option left in the ECB's toolbox is seen to be a major asset-buying plan, also known as quantitative easing.

Coeure dampened expectations that this could be used soon.

"The picture is very clear," Coeure told reporters.

"It (quantitative easing) is not needed now, because we do not see deflation in the euro zone and we have a deep sense that the measures we decided last week are appropriate to face the prospects of low inflation that we are facing today," he said.

"We would be ready to act if the action last week would not be effective in pushing inflation back (towards our target)."

Coeure added that if the euro zone was still facing an extended period of low inflation later on, "then we would stand ready to do more, but that's really not a discussion that we are having today". (Reporting by Marja Novak; writing by Eva Taylor; Editing by Kevin Liffey)

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