ECB Governing Council member Demarco says a euro at $1.25 is "not the end of the world"

Alexander Demarco, a member of the Governing Council of the European Central Bank, told Econostream that even if the euro further appreciates to above $1.20, the European Central Bank does not need to be overly concerned.

In an interview published on Thursday, Demarco stated, "Past research shows that the equilibrium exchange rate may be around $1.20 to $1.25, and the current rate is still some distance from that level. Even if it reaches that level, it's not the end of the world."

Demarco also noted that, given recent events in the United States, investors may be adjusting their portfolios to reduce dollar allocations. "If we want the euro to play a stronger role on the international stage, a certain degree of appreciation may be an inevitable result," he said.

Most European Central Bank officials have downplayed the potential inflationary pressure from the recent appreciation of the euro. Vice President Luis de Guindos said last July that an exchange rate of $1.20 was "perfectly acceptable," but higher rates "would be much more complicated."

Editor: Chen Yujia