Transcript of the questions asked and the answers given by Dr. Willem F. Duisenberg, President of the ECB, and Christian Noyer, Vice-President of the ECB Question: I would be very interested if you had anything to say about the exchange rate of the euro, if the central bankers of Europe seem comfortable with it. It seems that the strategy of the ECB is now, in light of today’s actions, a double strategy to re-invigorate the European economy. On the one hand, you got the exports boosted by the euro and, on the other hand, you got an interest rate cut to lubricate the economy as well. Duisenberg: First of all, as far as the exchange rate of the euro is concerned, I always like to take a slightly longer term perspective than is normally done in articles and considerations about it. I would like to point out that, if you look at the rate of the euro, and look back to what we - in our jargon - call the synthetic euro, the euro that you can calculate before the euro was in existence, then you can observe that the rate of the euro to the dollar has been more or less stable at around a level of USD 1.08 to USD 1.10 from the middle of 1997 until early September 1998. In the middle of September it started to rise to reach a level of 1.16 at the end of the year, and that was the level at which we entered the euro era.
Mr. Duisenberg reports at a press conference on the outcome of the meeting of the Governing Council of the ECB. Introductory statement by the President of the European Central Bank, Mr. Wim Duisenberg, in Frankfurt on 8 April 1999. __________________________________________________________________________________ Ladies and gentlemen, the Vice-President and I are here today to report on the outcome of today’s meeting of the Governing Council. Let me start with the Governing Council’s discussion of recent economic developments and the decisions that the Governing Council has taken today in the field of monetary policy. After an indepth review of recent monetary, financial and economic developments, the Governing Council decided that the interest rate for the ECB’s main refinancing operations will, from next week on, be set at 2.50%. In addition, the interest rate on the marginal lending facility will be lowered to 3.50% and the interest rate on the deposit facility to 1.50% with effect from tomorrow. Let me report in some more detail on the reasons for which the Governing Council, in the context of the ECB’s monetary policy strategy, deemed it appropriate to lower interest rates. As regards monetary developments in the euro area, the acceleration of monetary aggregates seen in January 1999 was partly reversed in February. The 12-month growth rate of M3 declined from 5.6% in January to 5.2% in February.