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FRANKFURT (AFX) - Christian Noyer, vice-president of the European Central Bank, said there is "no reason to foresee" further euro zone rate cuts "in the short term".
In an interview with Agence France-Presse, Noyer said the ECB's May 10 cut in its key rate to 4.50 pct from 4.75 was "an adjustment which corresponded with the information we had, the prospects we had at that moment."
"And today I see no reason to foresee other rate changes in the short term in whatever direction," he said in the interview, which took place yesterday.
"The economic situation of the United States and that of the euro zone are totally different. The United States is faced with a brutal slowdown. The euro zone is faced with a progressive and much more moderate slowdown.
"I find it hard to understand the idea that everyone should do the same thing if the situations are different," he said. Noyer said intervention to support the euro is an "option" which "exists".
"It is obvious, this option exists for all central banks, and thus including the ECB, naturally," he said, though he declined to say if the bank is considering using the option, as it did last autumn. The euro fell below 0.85 usd this morning for the first time since Nov 27 and was quoted at 0.8484 usd at 2.08 pm.
Noyer said the euro is bound to rise at some point. "I don't think there is anyone in the world who doubts that the euro is bound to rise against the dollar."
Prospects for price stability in the euro zone next year remain "favourable" despite the current boost in inflation, he said, noting that the slight acceleration in euro zone M3 in April is not significant.
Concerning inflation, "what is important for us, is that beyond the current price rises which are influenced by a certain number of factors such as oil prices or food prices, prospects for price stability in the medium term, that is to say very specifically next year, are favourable," he said.
"The current level of prices is not pertinent for judging monetary policy, we take it into account only to the extent that it can create risks of secondary effects," in other words wage claims, Noyer said. On this point, the ECB believes the situation is under control.
Current inflationary tensions stem principally from the continued high level of oil prices and a surge in certain food products following the outbreaks of mad cow disease and foot and mouth disease. "These should be short-term movements which do not have lasting effects," Noyer said.
Euro zone consumer price inflation reached 2.9 pct year-on-year in April, compared with the ECB target of 2 pct.
"Very clearly, the stronger the euro is, the more that helps to keep prices stable, the more that makes the job easier," Noyer said. Concerning growth in M3, "for the instant, that signifies nothing," he said. "It doesn't change at all the diagnosis we made on May 10," when the ECB cut its key rate to 4.50 pct from 4.75.
Noyer said the question of who will succeed Wim Duisenberg as ECB president is not a "current" concern.
"Mr Duisenberg has an eight-year mandate. If he wants to shorten it, it is up to him to tell the governments in time for them to reach an understanding on his successor," the vice-president said.
"So long as he has not given that indication, I consider that the problem is not current and it is wrong to talk about it," Noyer said. On his nomination in May 1998, Duisenberg said he did not expect to serve the full eight years, but he has not said exactly when he expects to stand down.