MNI POLICY: Draghi Says ECB Does Not Target Exchange Rate

By Luke Heighton

     SINTRA, PORTUGAL (MNI) - European Central Bank President Mario Draghi

insisted the ECB does not target the euro exchange rate, in a response to tweets

by U.S. President Donald Trump.

     "We have our remit, we have our mandate. We don't target the exchange

rate," Draghi told a forum in Sintra, Portugal.

     Earlier, Trump had suggested Draghi had used a speech in which said the ECB

had "considerable headroom" for fresh quantitative easing to manipulate the

value of the euro against the dollar.

     "Mario Draghi just announced more stimulus could come, which immediately

dropped the Euro against the Dollar, making it unfairly easier for them to

compete against the USA. They have been getting away with this for years, along

with China and others," Trump wrote.

     Draghi reiterated that additional monetary stimulation would only be used

"in the absence of improvement" in the eurozone economy. He stressed that

forward guidance remains the ECB's primarily policy tool, and can be enhanced

"by adjusting its bias and its conditionality to account for variations in the

adjustment path of inflation"; and that "the limits of the tools available to

the ECB are "specific to the contingencies we face."

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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