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The European Central Bank (ECB) may struggle to meet its inflation target due to a sharp rise in the euro’s exchange rate, warns Governing Council member Francois Villeroy de Galhau. This development could complicate the ECB’s monetary policy decisions in the near term.
- ECB's inflation target at risk due to euro appreciation, says Villeroy de Galhau.
- Stronger exchange rates can suppress inflation by reducing import costs.
- Monetary policy may need adjustment if currency strength persists.
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