European Central Bank Governing Council member Christian Noyer said that the strong level of the euro currency was weighing heavily on economic activity and inflation and that it would be logical for it to depreciate.
The remark echoed a call from French Prime Minister Manuel Valls last week urging the ECB to bring down what he said was an “overvalued” euro and pressing it to purchase assets on the market.
“We have no exchange rate goal. But, it (the euro) is an element that weighs heavily on economic activity and inflation. It would be logical, given the disparity with the US cycle, that the euro depreciate a bit,” Noyer told the French magazine Investir.
Noyer also said the “Eurosystem” of ECB and eurozone national central banks had the capacity to launch an asset-buying programme, though he said its effectiveness may be limited.
“Yes, let’s be clear, the Eurosystem can indeed launch a programme of asset-buying while respecting its mandate on price stability,” he said.