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Financials

UPDATE 1-Don't misuse FX rates to boost growth, Germany's Schaeuble says

* Schaeuble says more stability on financial markets needed

* Says FX rates should not be misused to boost growth

* Finance minister calls for more sustainable growth policy

* “Road of too easy money finally leads to misfortune” (Adds quotes on global risks and foreign exchange policy)

BERLIN, Feb 24 (Reuters) - Foreign exchange rates should not be misused to boost domestic growth at the cost of other economies and financial markets need to be more stable, German Finance Minister Wolfgang Schaeuble said in an interview published on Wednesday.

Speaking ahead of a G20 meeting hosted by China this week, Schaeuble also told German news agency dpa that excessively loose monetary policy carries risks, and pressed the U.S. central bank to provide more clarity on its policy outlook.

“We have to get more stability into financial markets. The jointly agreed rules of the G20 may not be questioned. And foreign exchange rates should not be misused as an instrument to create growth,” Schaeuble said, without naming any country.

He said G20 policymakers had to focus on creating sustainable growth without piling up more and more new debt, warning: “The road of too easy money finally leads to misfortune.”

The veteran politician said there were conflicting signals on the U.S. Federal Reserve’s monetary policy and that he would urge central bankers at the G20 meeting in Shanghai to be more reliable in their communication.

“We have a high degree of uncertainty,” Schaeuble said more generally on the state of the world economy. “The geopolitical risks are enormous: the Middle East, North Africa and sub-Sahara, the Ukraine conflict.

“And the risk of Great Britain leaving the EU, a Brexit, is not off the table yet. The European Union is not in the best shape, to put it diplomatically,” he added.

A senior German official said earlier on Wednesday that Germany expects “intensive discussions” about the weaker global growth outlook at the G20 meeting, but that Berlin would stick to its balanced budget policy despite U.S. calls to increase state spending to boost global demand. (Reporting by Michael Nienaber; Editing by Paul Carrel and Catherine Evans)

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