VIENNA (MNI) – The euro’s exchange rate is on the high side, but it
should be seen with “composure,” especially if it is a short-term
phenomenon, European Central Bank Governing Council member Ewald Nowotny
said Friday.
Speaking at a conference here, Nowotny noted that people had also
complained just a few short months ago when the euro was considered too
weak. He said the ECB had no intention of intervention in currency
markets, because to do so would compromise the central bank’s primary
goal of price stability.
“The ECB does not have a currency exchange rate target. We have
flexible exchange rates,” Nowotny, who heads the National Bank of
Austria, said. “The exchange rates are determined on the market. We
don’t interfere because that would conflict with our goal of price
stability.”
He conceded that the euro is “at a point that is relatively
high…but before there were those who worried about it being too low.”
He added: “We should see it with a certain amount of composure. If it
happens over the short term, it won’t have any massive consequences. Of
course if it happens over the long-term, it does dampen our exports.”
Nowotny also said the ECB’s currently low refinancing rate of 1% is
the result of the financial crisis, and “it won’t last forever.”
–Frankfurt newsroom, +49-69-720-142; frankfurt@marketnews.com
[TOPICS: M$$EC$,M$X$$$,M$$CR$,MGX$$$,MT$$$$]
