Europe Central Bank head Mario Draghi has been trying to play down worries about currency wars.
At the European Parliament on Monday, he responded to concerns that the recent high value of the euro against other currencies could choke off the region’s economic recovery.
Though the ECB will keep a close eye on things, Draghi made it clear he does not believe countries are deliberately weakening their currencies: “Most of the exchange rate movements that we have seen were not explicitly targeted, they were the result of domestic macro-economic policies meant to boost the economy. In this sense the exchange rate is not a policy target, but its important for growth and price stability.”
Over the weekend, G 20 finance ministers and central bank governors, responded to feverish debate by saying there would be no currency war – and they did not criticise Japan’s money printing policies.
Continuing in that vein, on Monday Draghi called any language referring to currency wars “really excessive”.
Still foreign currency experts say Draghi is worried about the strength of the euro against the yen and the dollar, but there is not much he can do about it.
While Japan and the United States are pursuing loose monetary policies, the ECB is starting to unwind some of its crisis measures – a contrast has helped drive up the euro.