PARIS--The European Central Bank is watching the level of the
euro on foreign exchange markets to assess the impact of the
currency's persistent strength on low inflation in the currency
bloc, Benoit Coeure, executive board member with the ECB, told Le
Monde in an interview.
"We need to know if the level of the euro and the future trends
[in the exchange rate] risk slowing inflation from returning to a
level close to 2%, which is our definition of price stability," Mr.
Coeure told the newspaper.
The ECB board member added that the appreciation of the euro
since the summer of 2012 has contributed to the euro zone's low
inflation rate and reinforced the ECB's decision to keep interest
rates low.
"All other things being equal, the stronger the euro, the more
an accommodating monetary policy is justifiable," Mr. Coeure
said.
The ECB board member said although the central bank doesn't set
targets for the euro's exchange rate, the value of the currency on
foreign-exchange markets is one of the factors it takes into
account when making monetary policy decisions.
Newspaper website: http://www.lemonde.fr
Write to Paris Bureau at djnews.paris@dowjones.com