ECB should focus on rate policy over balance sheet cut, Centeno says

FRANKFURT (Reuters) – The European Central Bank should focus on interest rate policy over balance sheet operations as its deposit rate is still far from the so-called neutral rate, the bank’s intermediate goal, Portuguese central bank chief Mario Centeno told Bloomberg TV.

“Right now frontloading other debates may in my opinion have a destabilising effect that we really need to avoid,” Centeno said when asked if it was time to discuss quantitative tightening. “We have a path towards normalisation of monetary policy and that’s the focus right now.”

(Reporting by Balazs Koranyi; Editing by Raissa Kasolowsky)