TOKYO (MNI) – European Central Bank Governing Council member Ewald
Nowotny expressed his tolerance for the recent depreciation in the euro,
saying the recent price action in the euro is “within the scope of
normal” development, according to a local media report.
While Japan’s Finance Minister Jun Azumi has asserted that the
euro’s recent fall was lopsided, the ECB council member said that it is
“premature to judge” that the recent development in the FX markets has
been one-sided, the Nikkei quoted him as saying in an interview.
Nowotny was quoted by the business daily that the euro-dollar is
still trading at a higher level than in 1999, when the single currency
was introduced.
He also projected that as the region’s economy is expected to begin
recovering in late 2012, the single currency should reflect such changes
in the economy trend.
Referring to the price outlook and prospects for the monetary
policy management, Nowotny also told the Nikkei that should the region’s
economy fall into a deflationary cycle, the ECB would need to “respond
accordingly,” but added that he “does not see such a development.”
He said the region’s CPI will stay slightly below 2% for the
reminder of this year.
Nowotny also stressed that while the ECB will stand ready to deal
with the region’s debt crisis by supplying “the liquidity in an
appropriate manner,” governments also must make efforts to restore
investor confidence.
yseki@marketnews.com
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