WTO's Lamy says worried by currency interventions

BERLIN (Reuters) - International attempts to manipulate foreign exchange rates are a worry but the world has not entered a foreign currency war, World Trade Organization Director General Pascal Lamy said in a newspaper interview. In the interview issued on Saturday, one day ahead of its official publication, Lamy was asked by German weekly Welt am Sonntag what risk there was of a currency war breaking out.

"I wouldn't talk of a war, more like tensions and frictions. The uncoordinated interventions on exchange rates worry me," he said, adding that he and other senior policymakers were concerned that recent disputes could lead to protectionism.

Concerns that currency devaluations could spark trade wars prompted the Group of 20 major economies to agree they would not compete to lower the value of their foreign exchange rates at a meeting in South Korea earlier this month.

Lamy added that there was no question that the Chinese yuan was undervalued, but noted that "it was not clear that a higher yuan rate would automatically create more jobs in America."

Germany, Europe's biggest exporter, has sparred lately over trade policy with the United States, which sought to push through a proposal at the G20 meeting to limit current account imbalances to 4 percent of gross domestic product.

Asked by the paper whether he thought Germany was exporting too much, Lamy said as WTO director general he could not be expected to criticize it for trading successfully, adding that the country served as an example to others.

(Reporting by Dave Graham; editing by Sue Thomas)