The European Central Bank must keep an eye on the euro exchange rate to assess whether it poses a risk to the medium-term inflation outlook, ECB Governing Council member Ardo Hansson said on Wednesday.
In recent weeks, the ECB has spoken frequently about the currency and warned that any further strengthening could lead it to use unconventional tools such as asset purchases.
Hansson, the head of the Estonian central bank, told Reuters on the sidelines of a news conference that while the ECB “will never target” the exchange rate, the fact that inflation is low means “you probably have some heightened focus.”
“So I think we have to keep an eye on it,” he said of the exchange rate.
Asked whether he was watching a particular threshold for the euro, he replied: “No.”