ECB Monitors Euro Exchange Rate as It Prepares to Reduce Stimulus
September 25 2017 - 10:17AM
Dow Jones News
By Tom Fairless
The European Central Bank is closely monitoring the euro
exchange rate as it prepares to announce plans to scale down its
large monetary stimulus "later this year," ECB President Mario
Draghi said on Monday.
The comments, at the European Union parliament in Brussels,
underline the ECB's caution as it approaches its biggest policy
decision in years.
Mr. Draghi said the ECB is increasingly confident it will meet
its inflation target and is preparing to "recalibrate" its monetary
policy, which includes a EUR60 billion ($71.5 billion) a month
bond-buying program.
The ECB chief has previously indicated that the bank will
probably announce the future of its bond-buying program, known as
quantitative easing, in late October. The program is currently due
to run at least through December.
But policy makers are still waiting for signs that the economic
recovery is translating into stronger inflation, Mr. Draghi d. The
ECB aims to keep inflation just below 2%, but has missed that
target for years.
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"We still see some uncertainties with respect to the medium-term
inflation outlook," Mr. Draghi said. "Most notably, the recent
volatility in the exchange rate represents a source of uncertainty
which requires monitoring."
The euro has risen sharply against the dollar in recent months
amid a broadening economic recovery in the 19-nation euro area and
signals from ECB policy makers that they are preparing to tighten
monetary policy.
The ECB needs "to be patient and persistent," Mr. Draghi
said.
Write to Tom Fairless at tom.fairless@wsj.com
(END) Dow Jones Newswires
September 25, 2017 10:02 ET (14:02 GMT)
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