European Central Bank (ECB) policymaker Francois Villeroy de Galhau has stated that the recent economic and market volatility is a result of ongoing trade tensions, not a currency war.
In an interview with regional French newspapers published on Friday, Villeroy, who also serves as the Governor of the Bank of France, clarified:
“Unfortunately, there is a risk of trade war, but a currency war would be a situation where each country is actively using its interest rates to try and gain an economic advantage. We are not at that point right now.”
Villeroy emphasized that the recent currency fluctuations are more a result of economic forecast revisions than deliberate monetary manipulation.
This comes as the ECB prepares to maintain its stance on past stimulus policies during its upcoming strategy review, aimed at steering inflation and supporting growth across the eurozone.
Despite global financial unease, Villeroy’s comments aim to assure markets that competitive devaluation is not currently a policy tool among major economies.
