PARIS (Reuters) - The European Central Bank is targeting favourable financing conditions rather than pumping a given amount of liquidity into the economy with its latest stimulus decision, ECB policymaker Francois Villeroy de Galhau said on Friday.
The ECB said on Thursday it was increasing the overall size of its Pandemic Emergency Purchase Programme (PEPP) by 500 billion euros to 1.85 trillion euros. It extended the scheme by nine months to March 2022.
Villeroy, who is also head of France's central bank, said on BFM Business radio that the aim was not "to invest a certain amount each month, but rather a result", which is favourable financing conditions for the economy.
"We will do less if the financing conditions remain favourable like today. If the opposite is needed, we will do more," he said.
Villeroy also said that the ECB was keeping a close eye on the exchange rate with the euro trading at its highest level since April 2018.
"We do not have an exchange rate target ... but we have a strong vigilance about the effects of the exchange rate on inflation. We are ready as a result of this vigilance to use all our instruments," Villeroy said.