European countries show limited exchange rate flexibility compared to global benchmarks.
European countries outside the Eurozone have mainly adopted either Inflation Targeting or fixed exchange rates in the past fifteen years. By analyzing different methods, it was found that Inflation Targeting led to increased exchange rate flexibility, but not as much as countries with floating exchange rates. In Europe, countries following Inflation Targeting also focused on stabilizing their exchange rates against the euro, while those with fixed rates remained relatively stable over the last decade.