| NEW YORK
NEW YORK The European Central Bank stands ready to take unconventional policy steps to fend off a "too prolonged" period of low inflation, though for now it expects inflation to rebound slowly, an ECB policymaker said on Monday.
"Should we note a deviation from this path, we will use every instrument within our mandate, including unconventional ones, in order to cope effectively with risks of a too prolonged period of low inflation," European Central Banker Christian Noyer told a luncheon at the New York Stock Exchange.
His comments largely reflected the message the ECB sent earlier this month when it opened the door to turning on its money-printing presses to boost the weak euro zone economy and inflation. On Saturday, President Mario Draghi flatly said the central bank would ease policy more if the euro kept strengthening.
While the ECB aims to keep euro zone inflation close to - but under - 2 percent, it has been running at just 0.5 percent.
Noyer said the ECB expects a "progressive return" of inflation to that goal. The central bank also expects to keep the bloc's key interest rate, now at 0.25 percent, "at present or lower levels for an extended period of time," he said at a Paris Europlace forum.
An asset-purchase program, also known as quantitative easing, is one option available to the ECB, though it was previously considered highly undesirable by some central bankers and only to be considered if prices were falling outright.
Policymakers have recently publicly broached the idea of cutting deposit rates below zero - effectively charging banks that hold excess cash at the ECB - or embarking on bond purchases as have the United States, Japan and Britain, if the threat of deflation became more acute.
(Reporting by Jonathan Spicer; editing by G Crosse and Chizu Nomiyama)