BIS-Countries not pursuing weak FX policy -Trichet

* Countries not actively pursuing weak currencies

* Central bankers did not discuss gold standard

* Must remain alert as recovery uneven, risks remain

By Catherine Bosley and Natsuko Waki

BASEL, Switzerland, Nov 8 (BestGrowthStock) – No country is actively
pursuing weak currency policies and excessive foreign exchange
swings could hamper global growth, leading central bankers said
on Monday.

Jean-Claude Trichet, speaking as chair of talks on the
global economy at a Bank for International Settlements meeting,
said central bankers did not even discuss returning to the Gold
Standard to control currencies, adding it was a topic which
surfaces from time to time in the United States.

“(Currency war) was not mentioned at all. I have to say that
all participants mentioned they were not pursuing weak currency
policies,” European Central Bank chief Trichet said, adding that
central banks were sticking to adopting more currency
flexibility, a message agreed by G20 financial chiefs last

He said moving to a gold standard to control currency
fluctuations did not even come up in the discussion. World Bank
President Robert Zoellick said on Monday leading economies
should consider readopting a modified global gold standard to
guide currency movements. [ID:nSGE6A70A7]

“We did not discuss the Gold Standard,” Trichet said. “In my
memory such an idea was mentioned long time ago by Jim Baker
when he was a Secretary of Treasury in the 1980s. I have no
particular comment.”

Trichet also said the global economy continues to recover,
but in an uneven fashion with growth in emerging markets — some
of which have seen high capital inflows — outpacing that of
advanced economies.

“There is a degree of uncertainty … We have to accept that
we’re in a universe there are risks where we have to remain

All central bankers agreed that price stability and
anchoring of inflation expectations remain crucial. The
appropriate level for inflation in advanced economies is
slightly below 2 percent, Trichet added.

Emerging economies have seen huge capital inflows as a
result of accommodative monetary policy by central banks in
advanced economies, especially by the U.S. Federal Reserve.

Trichet said that he would not discuss individual countries’

Central bankers attending the bi-monthly talks included
People’s Bank of China chief Zhou Xiaochuan and Bank of England
Governor Mervyn King.
(Editing by Giles Elgood)

BIS-Countries not pursuing weak FX policy -Trichet