ECB's Rehn says inflation confidence will allow for rate cuts

FRANKFURT (Reuters) - European Central Bank interest rates will keep falling as policymakers are confident that inflation will stabilise at the bank's 2% target, Finnish central bank chief Olli Rehn said on Wednesday.

"We are now confident that inflation will stabilise at the target as predicted and monetary policy will stop being restrictive in the near future," Rehn said in a speech in Oulu, Finland.

Rehn noted that markets expect the ECB's deposit rate to ease from 3% to 2% by the end of the year but stopped short of endorsing these expectations, merely arguing that rates will fall and the pace will de determined meeting by meeting.

(Reporting by Balazs Koranyi; Editing by Sharon Singleton)

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