Key commentaries from Benoît Cœuré

Today, speaking at Government borrower’s forum, European Central Bank’s (ECB) executive board member, Benoît Cœuré said that the bank will not cut interest rates to absurd levels, which means if required ECB will resort to other instruments such as additional bond purchases or inclusion more instruments.

Mr. Cœuré is well known for his dovish bias and his commentaries are echoing those of President Mario Draghi’s and Peter Praet, another executive member. Both of them, do not anticipate further rate cuts as necessary and warned that rates can be cut only up to a limit, probably as long as benefit outweighs, cost.

Mr. Benoît confirmed as of now, benefits of lower funding cost, increasing lending volumes, lower NPAs are outweighing the deleterious effect at banks. Banks profitability has actually improved, despite lower rates but it will not remain that way if rates are reduced a lot more from current -0.4% level.

Since German criticism of lower interest rates, several ECB policy makers and board members like Peter Praet, Mario Draghi and Jens Weidmann came out defending its independence and monetary policy.

Euro has broken above 1.16 against Dollar.