The European Central Bank pays attention to the euro exchange rate, but several officials say there is no need for alarm

The European Central Bank is monitoring the recent appreciation of the euro, but Governing Council member and Governor of the Bank of Greece, Yannis Stournaras, believes there is no cause for alarm.

"We are monitoring exchange rates and all variables that affect economic activity and inflation," Stournaras stated. He emphasized that the euro's strong performance since March 2025 has already been factored into the ECB's forecasts, and that the euro against the US dollar remains within its historical trading range.

He said on Friday: "Most of the appreciation occurred in the first quarter of last year. So this is not a dramatic change and is not enough to make us alter our course of action."

Other policymakers also agreed with Stournaras' assessment of the euro.

Francois Villeroy de Galhau, Governor of the Bank of France, told BFM Business TV: "The dollar's volatility has stabilized in the past few days. We are around $1.18—which, coincidentally, if you look at the average since the euro's inception, is the historical exchange rate."

Martins Kazaks, Governor of the Bank of Latvia, also pointed out that in recent months the euro exchange rate has fluctuated within a relatively narrow range, and said these changes have been reflected in the ECB's baseline scenario.

However, he warned that if the euro appreciates "by a large magnitude and at a rapid pace," it could dampen inflation prospects and "may trigger a policy response."

Stournaras believes that the risks to inflation and economic growth prospects are broadly balanced, and said officials are "quite confident."

"We don't believe we should change the course of action," he said. "We are data-driven. So far, this has proven to be a very good approach."

Editor: Liu Mingliang