VIENNA (AFP) - Austrian central bank chief and European Central Bank governing council member Ewald Nowotny said on Thursday that he saw no risk of deflation in Europe at the moment.

Neither would the sharp cuts in interest rates in the 16-nation eurozone in recent months fuel inflationary pressures in the region, Nowotny insisted in a speech at a congress organised by the Austrian central bank OeNB here.

"We could see, in the immediate term, falling prices in a number of eurozone member countries as a result of falling energy prices," Nowotny said.

"I would like to stress, however, that I see neither a risk of deflation nor inflation in the medium term," the central bank chief said.

A week ago, the ECB cut its main interest rate for the seventh and probably last time to a record low of 1.0 percent to boost activity in the slumping eurozone.

But Nowotny insisted the rate cuts would not fuel inflationary pressures in the region's economy.

"Neither short-term inflation expectations, credit growth nor money supply growth currently indicate any inflation risks. However, these developments will be monitored closely in order to act quickly if necessary," he said.