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Lagarde: Didn't Discuss Exchange Rate, But Attentive To It

ECB

Final questions to Lagarde come from MNI's Les Commons: How does the ECB decide whether it is the pandemic or other factors that are driving fragmentation and when to use flexibility of the PEPP? Are you concerned over the level of the euro, particularly regarding imported inflation and what can be done about it?

  • A: We decided previously that reinvestments can be adjusted flexibility over time, jurisdictions and asset classes. This would apply to other sets of circumstances i.e. not necessarily the pandemic.
  • As we move along the path of policy normalisation, we can develop new tools if needed as we have shown in the past. This is what flexibility will be about.
  • We have not discussed the issue of the exchange rate, but this is a matter that we are attentive to.

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