March 31, 2019 / 10:38 AM / 23 days ago

ECB's hawkish Knot makes dovish sounds on rates long-term

BERLIN, March 31 (Reuters) - Dutch central bank Governor Klaas Knot expects the euro zone economy to pick up speed in the second half after a sluggish start to the year, but in an interview with Handelsblatt the noted hawk was distinctly dovish on long-term interest rates.

Knot, one of the most prominent hawks on the European Central Bank’s rate-setting committee, said though he was strongly in favour of normalising policy after years of anti-crisis measures, it was clear that even afterwards interest rates would be lower than before the crisis.

He also repeated his scepticism about multi-tiered deposit rates to help well-capitalised banks with excess liquidity, saying he would need to see clear evidence that negative interest rates were hurting lending to the real economy.

Reporting by Thomas Escritt; editing by Emelia Sithole-Matarise

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