European Central Bank President Christine Lagarde stressed on Thursday that the ECB monitors the movements of the euro "very carefully" and has noted its recent depreciation, especially compared to the dollar. She acknowledged that the currency has an impact on inflation, but insisted the ECB does not and will not target an exchange rate.
Asked about policy changes in the event of a deeper recession, Lagarde stated that at a 0% interest rate the ECB is stimulating the economy with an expansionary monetary policy. "Doing that when we have 9.1% inflation and projected inflation at the end of our projection period north of our target at 2.3% simply does not warrant that accommodative monetary policy continues to stimulate," she stated.
