The euro’s depreciation is in line with the divergence of monetary policies around the world, European Central Bank President Mario Draghi said.
“The exchange-rate movement reflects the different path of monetary policies in Europe versus the monetary policies in other important countries,” Draghi said in an interview with Europe 1 Radio published on the ECB’s website today. “Our monetary policy will stay accommodative through time for an extended period of time while other countries’ monetary policies may gradually acknowledge that recovery is taking place in their countries.”
The euro has dropped 6 percent against the dollar since early June, when the ECB announced stimulus measures including interest-rate cuts and targeted longer-term loans for banks, and is trading near the lowest level in more than a year. Officials cut rates again this month and said the central bank will start buying asset-backed securities and covered bonds.