GENEVA (MNI) – The currencies of emerging market economies “have a
tendency or should have a tendency to appreciate” on the strength of the
large reserves in the possession of those countries, European Central
Bank Chief Economist Peter Praet said Monday.
Following a speech here, Praet also said that even if the debts of
fiscally troubled countries in Europe were monetized in violation of the
EU Treaty, that would not address the issue of pressing structural
reforms in those countries.
On the issue of an eventual ECB exit from the non-standard measures
it implemented to confront the crisis, Praet said, “we have to think
about having a good information system that allows you to withdraw that
central banking liquidity at a time when the commercial money starts to
reactivate” and markets return to normal.
“That’s a challenging thing to do,” he added. “We’re aware of that,
by the way.”
Praet pronounced himself “not pessimistic” with respect to the
outcome of the crisis and the future of the euro.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
[TOPICS: MGX$$$,MT$$$$,M$$EC,M$X$$$,M$$CR$]
