On the contrary, the exchange rate will be observed and analysed as a potentially important monetary policy indicator in the context of the broadly based assessment of the outlook for price developments. A stability-oriented monetary and fiscal policy, as stipulated by the Maastricht Treaty and the Stability and Growth Pact, is an essential pre-condition for a stable euro exchange rate.
The dollar has declined since early 2002, but net private capital inflows have remained strong. In the first two months of this year, net private foreign purchases of U.S. securities, which are admittedly volatile, averaged about $ billion, well above the $ billion monthly pace reached in 2001 and 2002, when the dollar was much higher.