Ireland debt worries likely to ease: Noyer

TOKYO (BestGrowthStock) – Market jitters over Ireland are likely to ease due to an EU/IMF rescue package, European Central Bank policymaker Christian Noyer was quoted as saying in an interview with Japan’s Nikkei business daily.

Noyer also told the newspaper he was not worried about the debt crisis spilling over to other euro zone economies, adding that Ireland was a unique case stemming from a crisis in the banking sector and that the situation in Southern Europe was improving.

To prevent borrowing costs of countries like Portugal or Spain from rising too high, the ECB has been buying their bonds in the secondary market, but the purchases have been moderate compared, for example, to similar moves in the United States.

Noyer said the ECB would continue current monetary policy measures as long as they are needed and at least until the end of the January-March period next year, according to the Nikkei.

The interview was published in Monday’s morning edition but the daily did not mention when it was conducted.

Noyer told the newspaper the ECB’s debt purchases were aimed at keeping the banking sector from malfunctioning but it would not play a primary role in realigning banks and stabilising financial systems.

He was also quoted as saying that a recovery in the euro zone economies would weaken slightly in the latter half of this year but he was not at all worried about the possibility of a double-dip recession in the region.

The outlook was bright for euro zone economies due to signs of a pick-up in domestic demand across the region, Noyer told the newspaper.

He also said the euro remained on the strong side when looking at effective exchange rates, and that effective exchange rates in the yen and the euro have been moving at appropriate levels in line with their past trends, the paper added.

The euro was holding just below a two-week high of $1.3438, having risen 1.5 percent on Friday helped in part by ECB’s purchases of Irish and Portuguese debt last week.

(Reporting by Tetsushi Kajimoto; Editing by Edwina Gibbs)

Ireland debt worries likely to ease: Noyer