ECB’s Simkus says rates may need to go below ‘natural’ level

VILNIUS (Reuters) – The European Central Bank is likely to cut its key interest rate down to its “natural” level between 2% and 3% but it may need to reduce it even further if a fall in inflation becomes entrenched, ECB policymaker Gediminas Simkus said on Monday.

“If the disinflation processes get entrenched… it’s possible that rates will be lower than the natural level,” Simkus, the Lithuanian central bank governor, told reporters in Vilnius.

(Reporting By Andrius Sytas; Writing by Francesco Canepa in Frankfurt)