September 20, 2017 / 12:56 PM / a year ago

Strong euro, economy call for ECB shift away from bond buys: Knot

FRANKFURT (Reuters) - The euro’s appreciation reflects a stronger euro zone economy, supporting calls for the European Central Bank to move away from its unprecedented stimulus policy, ECB rate-setter Klaas Knot said on Wednesday.

FILE PHOTO: Klaas Knot, President of the De Nederlandsche Bank, attends the 2016 Institute of International Finance (IIF) Spring Membership meeting in Madrid, Spain, May 25, 2016. REUTERS/Susana Vera/File Photo

“The appreciation of the euro should be considered a reflection of the relative strength and stability of the euro area economy,” Knot, the Dutch central bank chief, said at an event in Brussels.

“(This is) a clear indicator of the factors that underlie the reduced necessity of continued asset purchases ... supporting the call for a gradual but decisive rebalancing away from non-standard towards traditional instruments of monetary policy,” Knot, considered a hawk on the Governing Council, said.

He added the risk of deflation is largely gone and thus the main rationale for central bank asset purchases has disappeared.

Reporting By Francesco Canepa; Editing by Balazs Koranyi

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