The European Central Bank could continue to reduce interest rates as eurozone inflation approaches its target, Bundesbank President Joachim Nagel said.

The European Central Bank has room to cut its interest rates further if inflation eases to its 2% goal this year as it expects, ECB policymaker Joachim Nagel said on Tuesday, adding the outlook for prices was "encouraging".

The European Central Bank should lower borrowing costs cautiously as its current monetary-policy stance may no longer be holding back the region’s economy, according to Executive Board member Isabel Schnabel.