Central Bank head refuses currency war’s presence

LONDON - Anatolia News Agency

There is only survival policies of developing countries, no currency war, the governor says. AA photo

There is no currency war in the world, the issue is rather the question of Central Banks’ attempts to boost domestic demand within their own conditions, the governor of Turkey’s Central Bank said in London on March 1.

“Developing countries try to eliminate the side effects of the decisions of developed countries’ Central Banks,” Erdem Başçı said in response to economists questioning whether there is “currency war” or not.

Developing countries are in a struggle to reduce volatilities and side effects over both exchange rates and credits, he added, stressing that all countries had already unanimously accepted the last paragraph of the final G-20 communiqué.

The paragraph Başçı was referring to promises for “a sustained effort to continue building a stronger economic and monetary union in the euro area and to resolve uncertainties related to the fiscal situation in the United States and Japan, as well as to boost domestic sources of growth in surplus economies, taking into account special circumstances of large commodity producers.”

In his remarks, the governor said “Credit and currency misalignments hurt both price stability and financial stability in emerging market economies,” suggesting macro prudential policy to reduce high credit growth, as had been proved in their policies for the Turkish economy.