2004-12-08 08:40:10 DIW president says ECB should intervene to stop euro's rise against the dollar FRANKFURT (AFX) - The president of the German Institute for Economic Research (DIW), Klaus Zimmermann, has called on the European Central Bank to intervene in currency markets to halt the euro's rise
He told Focus Money in an interview that if the euro continues to rise, it could force Germany back into a period of economic stagnation
"Limited and discrete interventions are sensible now, because the exchange rate moves are to a large extent not based on real economic factors, but are rather related to uncertainties about American budget policy," Zimmerman said
"Otherwise, we could fall back into stagnation," he added
If intervention and rising interest rates in the US do not suffice to stop the euro's surge against the dollar, then the ECB should not hesitate to cut its interest rates, Zimmerman said
The euro hit a new all-time high of 1.3469 usd yesterday
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