* ECB policymaker says euro moving in standard ranges
* Nowotny says euro zone economy set to hit low point in Q1
* Sees no need for ECB to intervene
VIENNA, Feb 18 The euro's exchange rate should
not be dramatised with needless talk of currency wars, European
Central Bank policymaker Ewald Nowotny said on Monday, noting
the currency was moving within standard ranges.
The euro hit a 15-month high against the dollar earlier this
month, complicating the ECB's policy making tasks by weighing on
growth and feeding expectations that it may have to take fresh
policy action although some ECB members are against that.
"The dollar/euro exchange rate is moving in a range we have
had before. We have had no special developments. There is a euro
appreciation against the yen but not to a dramatic extent," he
The yen dipped near a 33-month low against the dollar on
Monday after Japan's prime minister signalled no change to the
country's ultra-loose monetary policy, which its G20 peers
earlier refrained from
"That means if it stays likes this we are having a sham
discussion," he added, calling talk of a currency war - amid
market perceptions that many central banks are trying to cheapen
their currencies - "absolutely unnecessary".
He reiterated that the ECB, which targets price stability
rather than exchange rates, had no need to intervene.
Nowotny, who is also head of the Austrian National Bank,
said his central bank still assumed the euro zone economy would
reach its low point in the first quarter of this year and then
But he added there were big discrepancies in growth rates
among euro zone members and said the outlook could still be
CASE BY CASE
He thought the Austrian economy would also touch bottom this
quarter and could grow a real 0.6 percent to 0.7 percent this
year, slightly better than forecast in December.
Nowotny stood up for Ireland's debt deal this month despite
some criticism it blurs the line of central bank financing of
Under the deal, Ireland won European Central Bank approval
to stretch out the cost of bailing out Anglo Irish Bank, slicing
billions off the country's borrowing needs and cutting its
Nowotny noted that the ECB did not explicitly decide on
Ireland's ability to relieve its debt burden by spreading out
payments to its central bank over more years, but added:
"As an outsider I see this as a reasonable solution that was
made here", not least because the ECB had advised against
involving investors in Ireland's debt resolution efforts.
Germany's Bundesbank, by contrast, took aim at the deal in
Ireland, saying the approach "underlines the increasingly close
and problematic ties between monetary and fiscal policy in the
European monetary union".
On other subjects, Nowotny said he thought Slovenia had the
capacity to handle its economic problems as long as it could
summon up the required political effectiveness.
"Slovenia is not to be compared with Cyprus", whose problems
were more difficult, he said.
He said Cyprus was a good example of the need for
pan-European bank supervision, adding the country needed to
crack down on perceptions its banks are being used to launder
money if it wanted to get outside help to address its woes.