Trichet says ECB has room for 0.25 pct rate cut

TOKYO (Reuters) - European Central Bank President Jean-Claude Trichet said the central bank has room to lower its benchmark interest rate by 25 basis points to 1 percent, the Nikkei business daily reported on Monday.

The Nikkei quoted Trichet as saying in an interview that he had signalled at last month’s policy meeting that he would not exclude a further moderate reduction in rates and that 25 basis points is his understanding of a moderate move.

Trichet also said that the ECB Governing Council is also of the view that a zero interest rate policy should be avoided, the Nikkei reported.

His comments echo remarks made in other interviews with Japanese newspapers.

In a separate interview with the Mainichi newspaper, Trichet was also quoted as saying that he is not lobbying to replace the dollar with the euro as the world’s main currency.

The ECB has cut its refinancing rate by 300 basis points since October to a record low of 1.25 percent in response to the global financial crisis. The central bank is widely expected to cut it to 1 percent at its next meeting on May 7.

Reporting by Stanley White; Editing by Edwina Gibbs