VIENNA (Reuters) - The European Central Bank cut interest rates on Thursday in part to help weaken the euro, ECB Governing Council member Ewald Nowotny said on Thursday, adding a euro/dollar rate around 1.30 or slightly lower was “going in the right direction”.
“The significant point here was to affect the exchange rate. As you have seen this happened quickly and will be lasting. From this side we have in any event a very clear relief effect for Europe’s export sector,” he said in an interview with Austrian broadcaster ORF.
Nowotny, who said he personally favoured the rate cut, said there had always been swings in the euro/dollar exchange rate.
“I don’t think extreme levels are sensible but the levels we have now - 1.30 or perhaps a bit less - these are levels that the European economy can live with clearly better than what we had half a year ago,” he said.
He declined to say at what level he would like to see the euro, saying only: “What is clear is that this is going in the right direction.” The euro traded at around 1.2940 by 9:38 p.m. BST (2038 GMT).
Nowotny was speaking after the ECB cut interest rates to a record low and launched a new scheme to push money into the flagging euro zone economy, surprising markets and leaving open the option of more to come.
Reporting by Michael Shields; editing by Andrew Roche