Any attempts to stabilise the exchange rate while at the same time meeting other targets, are thus futile in theory. In practice, they spawn a number of problems which are aggravated the closer one seeks to stabilise the exchange rate. A number of central banks, including several from new EU member states, currently base their monetary policy on inflation targeting.
In principle, the central bank seeks to approximately meet not only one, but two targets, an inflation target and an output-gap target, using just one instrument: the short-term rate. The reason that this is viable is that usually the targets work together.