A most important feature of the ECB’s institutional framework is that the mandate and the independence of the ECB are particularly well-protected since the Treaty can only be amended by unanimous decision of the Member States. The second cornerstone of the single monetary policy in the EMU is the ECB’s monetary strategy.
We certainly consider the impact of the exchange rate on the inflation forecast. However, given the well-established inflationtargeting regime and reduced pass-through, we do not need to react to depreciation too strongly. We can avoid unscheduled MPC meetings and instant rate hikes of hundreds of basis points. But this doesn’t mean that we can ignore depreciation entirely.