A GERMAN rate cut some time in the future was not ruled out by the strong 8.4 per cent rise in the M3 money supply in January, Bundesbank council member, Mr Ernst Welteke said yesterday.

Mr Welteke, who is also president of the state central bank of Hesse, said the rise in M3, a key inflation indicator, meant the German central hank had no option but to leave official interest rates unchanged last week.

"The current money supply development . . . left the Bundesbank last Thursday no other choice than to leave interest rates unchanged," Mr Welteke said in the text of a speech for a Frankfurt banking conference.

"This does not rule out an official rate reduction in the future," he said in the speech, which was made available ahead of delivery.

But he added: "Of course, monetary policy alone cannot be expected to change the course of the economy.

M3 money supply figures for February are expected later this week. Bundesbank chief economist, Mr Otmar Issing, expects M3 growth to accelerate in the short term but with no inflationary danger.