European Central Bank policymaker Joerg Asmussen was quoted in a newspaper interview saying he could imagine the Greek government using borrowed funds to buy back its own sovereign debt from financial markets in order to reduce its debt ratio.

According to an advance copy of an article to appear in Saturday's Sueddeutsche Zeitung newspaper, Asmussen said the aim would be to help Greece meet the debt-to-GDP ratio of 120 percent in 2020 targeted under its international bailout.

"At the moment it looks like Greece's debt level will rise to well above the target of 120 percent of GDP by 2020," Asmussen said. "Thus, one has to consider elements that could make it possible to achieve that goal. One possibility would be buying back debt."

He offered no details on where Greece might obtain the funds to undertake such a buy-back, the newspaper reported, but said the ECB could not finance such a scheme.

"It's quite clear that the ECB could not enact such a bond buy back," he said. "That would be a matter for the Greek government.

Greek bonds are trading at levels far below their nominal value, Asmussen said, so that if the Greece government were to start buying them back now, it would only have to pay 50 to 70 euros per 100 euros of nominal value.

Greece's debt ratios would drop considerably if it bought back its sovereign debt, he added.

(Reporting by Erik Kirschbaum; Editing by Catherine Evans)