ECB Vice President Luis De Guindos said today the central bank has to widen its monetary policy toolkit to ensure its effectiveness. Though, he emphasized that monetary policy alone cannot address all problems. He urged country with fiscal spaces to do more. He added that European economy is not going to fall into recession but growth will be below potential.
Separately,chief economist Philip Lane said euro’s exchange rate is not a policy target for the ECB. But, “It’s plausible that the impact of rate cuts on the euro exchange rate has intensified over time.”
