European Central Bank Governing Council member Ardo Hansson said the ECB stands ready to cut borrowing costs further and is technically prepared to make its deposit rate negative.

“The options on rate cuts are still not fully exhausted and there are all kinds of other measures that are still on the table,” Hansson said in an interview in Tallinn on Nov 22. “Of course, every time you use one option, you have one less to use. But I don’t see us, by any means, running out of our toolkit of things we can draw on.”

The Frankfurt-based ECB, fighting a slowdown in inflation that threatens to undermine the euro area’s recovery, cut its main refinancing rate by a quarter percentage point to a record low of 0.25 percent this month. Bloomberg News reported last week that policy makers are considering a smaller-than-normal cut in the deposit rate, currently at zero, to minus 0.1 percent if more stimulus is needed.

“We are technically ready” to reduce the deposit rate, said Hansson, who also heads Estonia’s central bank. “We’ve had a tradition of using those 25 basis points so I’d have to look at some analysis of different options. Theoretically, a smaller cut wouldn’t be off the table. Certainly, the bigger the move, the more impact you have.”

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