AMSTERDAM, March 13 (Reuters) - The euro zone is unlikely to need further unconventional monetary policy measures as stability is returning and deflation risks in the bloc are limited, ECB governing council member Klaas Knot said on Thursday.
Knot, the governor of the Dutch central bank, repeated that he would be in favour of dropping interest rates to below zero if needed, but said deflation fears were not material. “I don’t think it (deflation) will get out of hand,” he said.
“If that changed we would need to look again at whether we should do anything on monetary stance, the interest rate, or something about the monetary transmission process,” Knot added. “We have deployed instruments in both directions before.”
Speaking at the unveiling of the Dutch central bank’s annual report, Knot said the country was well-positioned to take advantage of a “worldwide upswing” but that financing for the domestic economy remained a concern.