Central banks should not intervene to support the euro if financial markets are shaken by an events such as a war in Middle East, European Central Bank (ECB) chief Wim Duisenberg said in an interview published Monday.
Asked whether central banks should intervene if a sharp change in currency valuations was caused by conflict in the Middle East, Duisenberg told The Times: "I wouldn't think so."
Duisenberg said he considered last month's intervention in the foreign exchange market, coordinated by G7 central banks, a success because "the euro has stayed more or less at that level and not resumed its prior continuous downward movement".
The central bank chief was speaking in an interview conducted on Thursday, since when the single European currency has again slipped below 86 cents. Early on Monday it was falling again towards 85 cents, at 0.8517 dollars.
The ECB president also said that there should not be any kneejerk reaction to sharp jumps in oil prices, but that authorities should just watch out for signs of knock-on inflationary effects that could require a rise in interest rates. – (AFP).
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)