Exchange rate management The exchange rate is a very important price in developing economies, which shouldn’t be ignored by macroeconomic management. It matters for inflation, output and financial stability, all of which are policy objectives. Many emerging market central banks manage their exchange rates to some extent, without necessarily pegging the rate, because exchange rate movements can have severe adverse macroeconomic effects.
And the fundamental goal is to strengthen the confidence and resilience in the banking sector. To achieve these goals, the SSM, with the ECB at its centre, has been entrusted with an extensive set of micro- and macro-prudential powers, covering all key tasks relating to the prudential supervision of credit institutions.