FRANKFURT (MNI) – It is “problematic” when a country intervenes in
foreign exchange markets to gain a competitive advantage, Bundesbank
Board member Andreas Dombret said in an interview pre-released
Wednesday.
From the point of view of Germany’s central bank, interventions
can, however, be justified in exceptional situations, namely if they
serve to solve functional disturbances in the markets, German weekly Die
Zeit reported.
Dombret told the paper that in rare cases it could be appropriate
to resort to “short-term measures that serve the establishment of
orderly market conditions.”
Accusations of currency manipulation have emerged as a hot issue
going into the meetings of the International Monetary Fund and World
Bank, taking place in Washington at the end of the week.
Governments using exchange rates as “policy weapons” to gain
economic advantage risk hampering the global recovery, IMF Managing
Director Dominique Strauss-Kahn said in an interview with the Financial
Times published Wednesday.
“There is clearly the idea beginning to circulate that currencies
can be used as a policy weapon,” Strauss-Kahn told the business daily.
“Translated into action, such an idea would represent a very
serious risk to the global recovery…Any such approach would have a
negative and very damaging longer-run impact,” he warned.
–Frankfurt newsroom; +49-69-720142; frankfurt@marketnews.com
[TOPICS: M$G$$$,M$X$$$,MGX$$$,MT$$$$,MI$$$$,M$$FX$,M$$EC$,MFX$$$]
