LM:High Euro A Key Factor For Low Inflation: ECB Noyer
BRUSSELS (Alliance News) - Strong euro is a challenge to the Eurozone and is a strong factor to pull down the inflation, European Central Bank governing council member Christian Noyer said Monday.
Though Noyer denied deflationary threats in the Eurozone, he acknowledged that high euro exchange rate is weighing on prices.
"An increase in the exchange rate is equivalent to an unintended and unwanted tightening of monetary policy," Noyer said in an annual letter to the French President.
The euro's appreciation would drive down import prices and weighs on overall inflation, which is now below the European Central Bank's target of less than but close to 2.0%, Noyer said.
