Keynote speech by Philip R. Lane, Member of the Executive Board of the ECB, at the 15th workshop on exchange rates, co-organised by Banka Slovenije with the Banca d’Italia, the Bank for International Settlements, the European Central Bank and the Nationale Bank van België/Banque Nationale de Belgique

Ljubljana, 3 December 2025

It is an honour to participate in this excellent workshop on exchange rates and to visit Bank of Slovenia.

This speech has two parts.^[1] In the first part, I will discuss the appropriate monetary policy response to deviations of inflation from the ECB’s symmetric two per cent medium-term target. In the second part, I will turn to the topic of this conference and outline some analytical perspectives on the interplay between the exchange rate and monetary policy.^[2]

Inflation deviations and monetary policy

The ECB has a clear orientation for the conduct of monetary policy: a symmetric two per cent inflation target over the medium term. This is articulated in…