* Draghi speaks ahead of G20 meeting in Russia
* See for more on ECB comments on Friday
MOSCOW Feb 15 European Central Bank President
Mario Draghi on Friday criticised "chatter" on currencies that
has roiled foreign exchange markets in recent weeks.
"All this chatter that has been undertaken in the past few
weeks is either inappropriate or fruitless - in all cases it's
self-defeating," Draghi told reporters before a meeting of Group
of 20 finance officials in Moscow.
Draghi declined - in line with policy - to say whether the
euro's exchange rate was appropriate but noted it was in line
with long-term averages in nominal and real terms.
He declined to be drawn into the international controversy
that has escalated over the expansive policies pursued by
Japan's new government that have weakened the yen.
"The mandate of the ECB is to pursue price stability in both
directions in the medium term," he told a news conference after
meeting Russian central bankers.
"The exchange rate is not a policy target, but the exchange
rate is important for growth and price stability."
He also avoided pre-empting a debate on the wording of a G20
communique on currencies and borrowing by governments, but made
it clear that he favoured structural reforms as a path to growth
rather than ramping up state borrowing.
"We don't believe that inflating budget deficits to create
demand is sustainable," Draghi said.
"We believe that the primary factor creating jobs and growth
is, for the euro area, structural reforms."
Commenting on Thursday's data showing the euro zone's gross
domestic product contracted more sharply in the fourth quarter
of 2012 than most economists had forecast, Draghi said it was
"more negative than expected".
But he said he saw increasing signs of the stabilisation of
economic activity at low levels. Business confidence was rising
and both companies and governments were finding it easier to
fund their spending needs.
Early repayments by banks of borrowing under the ECB's
long-term refinancing operations (LTRO) were "a sign that
confidence is returning in the euro area."
"Uncertainty about funding has been reduced for the banks
that are repaying the LTRO," Draghi said.
He added the ECB's monetary policy stance "remains
accommodative" and it would continue to offer LTRO funding on a
full allotment basis.