European Central will not allow continued appreciation of the euro

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European Central will not allow continued appreciation of the euro

 

       

 

 

April 15, 2014 12: 00 am

Washington a. v. b

President of the European Central Bank, Mario draghi, his tone on the appreciation of the euro and weak inflation, hinting that financial institution willing to move the money. unusual statement by the European Central Bank, which generally avoid the subject of exchange rates, draghi told a news conference in Washington on Saturday, ' if we want to keep monetary policy favourable as it is today, the continued high exchange rate (euro) may require a cash movement. This statement suggests that the European Central Bank will not let the currency rise.

Draghi, acknowledged that the level of the euro, the new French Prime Minister Manuel Valls too high, an increasing role to play in the decision-making process of the institution.

For his part, French Finance Minister, Michel Saban, the ' concern ' by the President of the European Central Bank ' interesting ' and ' share it ' some Governments.

As Jens vaidman, President of the German Central Bank, has sought to downplay the seriousness of the appreciation of the euro, is also the result of the flow of capital and the return of confidence in the euro zone. further explained his French counterpart, Christian Noyer, that international investment that escaped last summer from emerging countries to buy the euro led to the high price, which is a reflection of the rise of the European economy.

The phenomenon is not supposed to last long, especially if the dollar returned to rise. But he acknowledged that the rise of the euro would hold a bit to acceleration of growth and it is difficult to directly return to the European Central Bank's target for price stability through inflation of 2 percent. Indeed, the level of the common European currency, which reached last Friday, the highest level for three weeks, casting a shadow on the price and said Noyer inflation in the euro area will 1 allowance was 0.3 percent without the impact of the euro is strong. He echoed that his institution is prepared both draghi to soften a new monetary policy, a rate cut, or unorthodox measures stressed that it should not tolerate inflation in the euro zone.

And draghi during the press conference to describe the possible consequences of poor prices. The danger lies not only in the potential collapse of prices for consumer goods and wages, but also a weak inflation as bad. The rise in prices makes the process of economic adjustment more difficult in States subject to the pressures of any southern European States and hold debt in the public and private sectors. Draghi was compounded by signs of good faith, at the time of his policy has a lot of comments in recent days in Washington, where meetings of the G20 and the International Monetary Fund and World Bank. And yesterday I considered the international monetary and Financial Committee, the political body of the International Monetary Fund, the European Central Bank should consider additional moves in the event of continued weak inflation. It is expected to take the Board of Governors of the European Central Bank's next decision on interest rates on 8 may in Brussels.

 

 

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