The euro area is fully equipped to implement an effective exchange rate policy. Such a policy requires four main ingredients: •  first, monitoring and assessing exchange rate markets and developments;  •  second, discussing market developments with the other major partners;  •  third, making public statements; and  •  fourth, intervening in the foreign exchange markets.
In practice, the role of the main actors, typically governments and central banks, depends on the precise architecture of foreign exchange policies, as I will explain. The central bank has to be involved, given its economic and technical expertise, but also because any intervention must be consistent with the monetary policy stance. Finance ministries are often involved because they own the foreign reserves.