Currency

Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Ingūna Ukenābele on 22 February 2021

• In the course of the pandemic, we have experienced the deepest economic downturn since World War II.
• This positive development was interrupted by increasing infection numbers towards the end of last year, also affecting economic activity at the start of 2021.
• That being said, it seems that we are now much better able to deal with lockdowns than the first time around.
• There has been some adaptation, which means that the second lockdown will have less severe economic consequences than the first one.
• And the sizeable fiscal package envisaged by the Biden administration will likely have positive spillover effects in the euro area.
• As regards monetary policy, we will ensure that there is no unwarranted tightening of financing conditions.
• A too abrupt increase in real interest rates on the back of improving global growth prospects could jeopardise the economic recovery.
• Once the pandemic starts to decline, can we expect to see a recovery as fast as the one we saw last summer?
• That is why the efficient use of public funds, especially those of the Next Generation EU instrument, is so important.
• These funds should be used to foster the transition to a greener and more digital economy.
• In our latest staff projections in December, we projected economic growth for the euro area to reach 3.9% in 2021.
• Due to the continued lockdowns, economic growth in the first quarter of 2021 may be somewhat weaker than expected.
• Based on our current projections, the euro area economy should be back at its pre-crisis level by mid-2022.
• In Latvia, for example, there has been a lot of criticism about the programme drafted by the Ministry of Finance.
• Overall, the policy response that we have seen in the euro area has been well-suited to counter the pandemic shock.
• Moreover, it should be considered whether the fight against money laundering could not be conducted more efficiently at the European level.
• But elevating powers and responsibilities to the European level is a difficult political issue and takes time.

• CoBanks estimates on commodity-specific trade weighted balances reveals a nuanced view of currency implications for U.S. agricultural exports in 2021.
• After a challenging currency environment in 2020, U.S. animal protein exports are expected to benefit from a modest tailwind fueled by a weaker U.S. dollar in 2021.
• Both the euro and New Zealand dollar are projected to be stronger against the U.S. dollar in 2021, providing a tailwind for U.S. dairy exports.
• Read the report, Dollar Divergence: U.S. Dollar Index Does Not Reflect True Dollar Impact on U.S. Ag Exports .

• The MIT DCI will use the funds to support open-source software development and advance the security of the Bitcoin protocol.
• CoinShares has sponsored a two-year research grant at London's Imperial College Centre for Cryptocurrency Research and Engineering, which resulted in the development of a new indexation methodology.
• In addition, CoinShares produces a regular series of events that educate and advocate for the digital asset class.
• CoinShares is Europe's largest digital asset manager, managing billions of assets on behalf of a global client base.

Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Ingūna Ukenābele on 22 February 2021

• In the course of the pandemic, we have experienced the deepest economic downturn since World War II.
• This positive development was interrupted by increasing infection numbers towards the end of last year, also affecting economic activity at the start of 2021.
• That being said, it seems that we are now much better able to deal with lockdowns than the first time around.
• There has been some adaptation, which means that the second lockdown will have less severe economic consequences than the first one.
• And the sizeable fiscal package envisaged by the Biden administration will likely have positive spillover effects in the euro area.
• As regards monetary policy, we will ensure that there is no unwarranted tightening of financing conditions.
• A too abrupt increase in real interest rates on the back of improving global growth prospects could jeopardise the economic recovery.
• Once the pandemic starts to decline, can we expect to see a recovery as fast as the one we saw last summer?
• That is why the efficient use of public funds, especially those of the Next Generation EU instrument, is so important.
• These funds should be used to foster the transition to a greener and more digital economy.
• In our latest staff projections in December, we projected economic growth for the euro area to reach 3.9% in 2021.
• Due to the continued lockdowns, economic growth in the first quarter of 2021 may be somewhat weaker than expected.
• Based on our current projections, the euro area economy should be back at its pre-crisis level by mid-2022.
• In Latvia, for example, there has been a lot of criticism about the programme drafted by the Ministry of Finance.
• Overall, the policy response that we have seen in the euro area has been well-suited to counter the pandemic shock.
• Moreover, it should be considered whether the fight against money laundering could not be conducted more efficiently at the European level.
• But elevating powers and responsibilities to the European level is a difficult political issue and takes time.