November 13, 2014 / 10:50 PM / 5 years ago

UPDATE 1-ECB's Noyer: 'no problem' buying govt bonds if needed

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PARIS, Nov 13 (Reuters) - European Central Bank Governing Council member Christian Noyer said he saw no problem with buying government bonds if interest rates rose or if the European economy suffered new shocks that derailed inflation forecasts.

“I would see no problem if the ECB bought other assets and, if needed, government bonds if, for example, rates rose because of a tightening of monetary policy in the United States in 2015,” he told French business daily Les Echos in an interview due to be published on Friday.

Noyer, who previously said that only “extreme circumstances” warranted such purchases, added that the ECB could also consider intervening on the corporate bond market if conditions did not require purchases of government debt.

ECB President Mario Draghi has announced the unanimous determination of the bank’s policy-setting council to take further unconventional measures if necessary to combat falling inflation.

Noyer said that he did not consider deflation a “credible risk”.

“The risk is mainly from inflation that is too low, for too long,” he said.

The ECB governing council member also said the bank could follow other international bodies such as the International Monetary Fund in lowering its forecasts for economic growth in France, although it still considered a recovery likely. (Reporting by Nicholas Vinocur; Editing by James Dalgleish)

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