European Central Bank council member Jens Weidmann said the euro’s exchange rate won’t derail the region’s economic recovery.
“I wouldn’t consider the euro exchange rate a threat to the economy,” Weidmann, who heads Germany’s Bundesbank, said in an interview with Bloomberg Television in Frankfurt today. “What we currently see is not completely out of line with fundamentals and corresponds roughly to the historical average.”
The euro has declined more than 4 percent against the dollar since the start of February, prompting ECB President Mario Draghi to drop a reference to the downside inflation risks its appreciation posed in this month’s policy statement. Weidmann said while the ECB doesn’t target the exchange rate, it does impact on its assessment of the economic outlook.
“We take into consideration the exchange rate movements in our policy assessment and the assessment of the monetary policy stance, and of course they will also influence the future inflation rates and in that sense they enter our policy deliberations,” he said.
The 17-nation currency traded at $1.3037 at 1:50 p.m. in Frankfurt today.
ECB Policy
Weidmann said the ECB, which has flooded the banking system with more than 1 trillion euros in cheap loans and cut its benchmark interest rate to a record-low 0.75 percent, will maintain its accommodative stance “for as long as necessary.”
“At the same time, we have to see that all over the world monetary policy is quite expansionary and that of course could pose risks for financial stability in some of the markets that we observe,” he said.
In Germany, low borrowing costs are driving up real estate prices, Weidmann said.
“I wouldn’t consider what is happening there to be a price bubble, but of course we see very strong price increases that we have to judge against the background of a very muted development in the past, and against the fact that the credit development is not as dynamic as a price bubble would suggest,” he said.
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“I wouldn’t consider the euro exchange rate a threat to the economy,” Weidmann, who heads Germany’s Bundesbank, said in an interview with Bloomberg Television in Frankfurt today. “What we currently see is not completely out of line with fundamentals and corresponds roughly to the historical average.”
The euro has declined more than 4 percent against the dollar since the start of February, prompting ECB President Mario Draghi to drop a reference to the downside inflation risks its appreciation posed in this month’s policy statement. Weidmann said while the ECB doesn’t target the exchange rate, it does impact on its assessment of the economic outlook.
“We take into consideration the exchange rate movements in our policy assessment and the assessment of the monetary policy stance, and of course they will also influence the future inflation rates and in that sense they enter our policy deliberations,” he said.
The 17-nation currency traded at $1.3037 at 1:50 p.m. in Frankfurt today.
ECB Policy
Weidmann said the ECB, which has flooded the banking system with more than 1 trillion euros in cheap loans and cut its benchmark interest rate to a record-low 0.75 percent, will maintain its accommodative stance “for as long as necessary.”
“At the same time, we have to see that all over the world monetary policy is quite expansionary and that of course could pose risks for financial stability in some of the markets that we observe,” he said.
In Germany, low borrowing costs are driving up real estate prices, Weidmann said.
“I wouldn’t consider what is happening there to be a price bubble, but of course we see very strong price increases that we have to judge against the background of a very muted development in the past, and against the fact that the credit development is not as dynamic as a price bubble would suggest,” he said.
For more Information Plz log on to www.rpshares.com
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