Currency Markets: Central Banks Do Not Carry Out Monetary Wars

Ewald Nowotny, a member of the European Central Bank's management committee, Wednesday (March 11th) downplayed doubts that central banks deliberately lowered their exchange rates to raise exports and inflation, saying that the foreign exchange market was not the dominant role of the global economy. Novotny (

An economist at the University of Goethe, Austria's central bank governor. Central Bank The president's meeting said that the assumption that a currency war is going on is wrong.

The time comes when the time comes. eurusd (1.0550, 0.0004, 0.04%) the exchange rate dropped to a nearly 12 year low on Wednesday. The euro has accelerated its depreciation since the European Central Bank launched a 1 trillion euro or more debt purchase plan on Monday.

Warren warned that the exchange rate volatility in the past has not been entirely unusual. He pointed out that for the global economy, exchange rate It is a related but not decisive factor.

The ECB's stimulus measures also led to a sharp decline in yields on government bonds in the eurozone, and the yields on bonds issued by Germany and Austria within 5 years were even negative.

He said he was not sure about the impact of negative returns, but he thought it would allow banks to sell assets at a good price, but they might face difficulties in maintaining profitability. It is not clear whether or not people are fully aware of the consequences of this development.

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The International Monetary Fund (IMF) agreed on Wednesday (March 11th) to provide Ukraine with a total of $17 billion 500 million in the coming year to help Ukraine's troubled debt default.

IMF said in a public statement that the Agency Committee approved $17 billion 500 million in loans on Wednesday, and that most of the funds would be allocated quickly, of which $5 billion could be put in place by the end of this week, and another $5 billion would be provided in the coming months. The remaining $7 billion 500 million loan will be provided by other international organizations.

The loan is part of a four year rescue package. IMF and the Ukraine government hope that the total amount of this four year loan will be $40 billion.

According to the above new loan scheme, the government of Ukraine has committed itself to improving personal income tax, simplifying the tax system, promoting the reform of people's livelihood in health care and education, so as to raise government revenue. It will continue to promote energy sector and banking reform and other structural reforms to improve business environment, attract investment and improve Ukraine's economic growth potential. In addition, the Ukraine government will use monetary policy to raise inflation and adopt a flexible exchange rate mechanism.

In addition, Reuters reported that Ukraine officials wanted to negotiate with the bondholders on the $15 billion 400 million debt relief.

Bloomberg News reported that the new financing will replace a two-year plan reached in April 2014, marking IMF's further involvement in the most serious confrontation in Europe since the end of the cold war.

The plan aims to bring Ukraine's "immediate economic stability" to Lagarde in a statement.

Ukraine officials expect their economy to be very bad this year, and GDP may even shrink by 11.9%. Ukraine's currency has dropped to its lowest level ever. Ukraine's international foreign exchange reserves have now shrunk by 2/3, with only 5 billion 620 million dollars left.

Arseny Yatseniuk, Prime Minister of Ukraine, said that Ukraine, beset by the balance of payments problem and the sharp depreciation of its currency, should be very much affected by the IMF plan. "This plan will enable us to stabilize Ukraine's economy and finance industry, and will help stabilize Ukraine's currency, and will enable Ukraine's economy to grow from 2016."

IMF said that Ukraine's economy should grow by 2% in 2016, after the economic contraction of 5.5% in 2015. By the end of 2015, the Ukraine government should have sufficient foreign exchange reserves to meet the import demand for about three months.