Bank of Israel Governor Stanley Fischer this month praised the Swiss National Bank for currency-market intervention as pressure mounts in his country from manufacturers and exporters to intervene to stabilize the shekel-dollar exchange rate.
The Czech Central Bank reiterated its readiness to weaken the koruna to help stem the country’s recession, according to the minutes of its Feb. 6 meeting, published on Feb. 15.
Hungarian Economy Minister Gyourgy Matolcsy said last month he opposes a strong-forint policy to fight inflation, while Polish Economy Minister Janusz Piechocinski told the Rzeczpospolita newspaper in an interview published on Jan. 14 that a weaker zloty would be good for Polish exporters.
Bank Rossii may also continue to smooth exchange rate moves in the Russian ruble after transitioning to inflation targeting by the end of 2014, Central Bank Chairman Sergey Ignatiev told lawmakers in Moscow today.
In South America, Brazil’s central bank sold reverse currency swap contracts on Feb. 15 for the second time this month to contain the real’s appreciation. Peru’s sol touched the lowest level in two weeks yesterday after the government said it’s ready to boost dollar purchases to weaken Latin America’s best-performing currency of the past year.
The ECB’s Draghi said in Brussels two days ago that exchange rates should reflect “fundamentals.” The euro is, “by and large, around its long-term averages,” he said. The 17-nation currency has gained 8.2% against the dollar in the past six months. German Chancellor Angela Merkel said today the present value of the euro against the dollar is within the currency’s normal range.
The government in Denmark, which pegs its krone to the euro, says it’s suffering from the fallout of the single currency’s appreciation. “Denmark’s competitiveness has been weakened by the exchange-rate movements,” Finance Minister Bjarne Corydon said in an interview in Copenhagen today.
New Zealand last confirmed intervening in foreign-exchange markets in 2007 as the kiwi appreciated to the highest level since being allowed to trade freely. Central bank data shows it sold NZ$263 million in November and December last year.
The Reserve Bank of Australia’s sales of its own currency outside foreign-exchange markets rose to a three-year high in October. The central bank sold A$1.4 billion ($1.44 billion) more than it bought during three months to a category of buyers that can include foreign central banks, the largest amount since the period ended July 2009, official data show.
RBA Deputy Governor Philip Lowe said Dec. 5 the central would not rule out intervention to deal with an “uncomfortably high” Australian dollar. “It would be a very big step to take,” he said.
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