BRUSSELS (MNI) – The current situation with respect to foreign
exchange markets cannot be described as a currency war, European Central
Bank Vice President Vitor Constancio said Wednesday.
“I would not characterize the situation as a currency war,”
Constancio told reporters on the sidelines of the Eurofi conference
here. “We are in a situation which is of course quite different. We have
seen some volatility. But volatility in exchange rates has been with
us…forever, so I don’t see that we can really designate the situation
as” a currency war.
He continued: “The evolution of the euro’s exchange rate we don’t
comment [on]…It’s not a target for our policy. We are in a floating
currency world and we respect that. And we think that the major
currencies should also behave in respecting that system that we have.”
Asked about the recent Bank of Japan intervention to weaken the
yen, Constancio declined to comment.
Constancio reminded that “we at the ECB have been proposing that
really the rules must be strengthened in order to avoid episodes like
the sovereign debt situation that we have been witnessing, and so we
will support all the new measures that can really strengthen and give
teeth to the Stability and Growth Pact.”
In other comments, he remarked that “the situation is such, as we
all know, that markets have been putting pressure on sovereign debt and
a response must be given to that in order to ensure the financing of the
national economies, which means that in particular in some cases, in
some countries, further fiscal consolidation became unavoidable in view
of the situation.”
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–Frankfurt bureau tel.: +49-69-720142. Email: frankfurt@marketnews.com
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