The June 2018 edition of the Bundesbank's Monthly Report outlines the prospects for the German economy on the basis of macroeconomic projections for 2018 and 2019, with a look ahead at the year 2020. It also includes an article on the zero lower bound on interest rates, the inflation rate target and the anchoring of inflation expectations.

The monthly report contains: Macroeconomic development of earnings and costs since the early 1990s, Reports from the Economic Research Centre, Development in the external economic relations of the EU accession countries in central and eastern Europe, Recent tax revenue trends.

Implementing a minimum exchange rate regime by buying foreign currency eases monetary conditions domestically and may thus have a direct impact on the inflation rate. However, such foreign currency purchases involve a risky expansion of the central bank’s balance sheet total. A new model can now predict what expansion of the balance sheet a central bank must expect if it wishes to implement a minimum exchange rate in the foreign exchange market.