U.S. Markets

ECB's room for rate cuts almost exhausted: Makuch

Jozef Makuch is seen during the Federal Reserve Bank of Kansas City's annual Jackson Hole Economic Policy Symposium in Jackson Hole, Wyoming, August 29, 2015. REUTERS/Jonathan Crosby

FRANKFURT (Reuters) - The European Central Bank should not consider any further easing for now and if further stimulus becomes necessary, it should focus more on unconventional measures rather than rate cuts, Governing Council member Jozef Makuch said on Friday.

“Interest rates can still be lower still and we are now testing how low they can go,” Makuch told a conference. “But if this tool must continue to be used, then I must urge caution so (we do not) bring about a totally counterproductive threat to financial stability.”

“The scope for deploying standard instruments is almost exhausted ... I don’t see much room for maneuver here,” he said, adding that unconventional tools are the new normal.

For now, however, no measures are needed because measures unveiled in March have not had time to work and early indications are that they will be effective, he said.

Reporting by Balazs Koranyi; Editing by Alison Williams