UPDATE 2-Britain's central bank chief riled by G7 mixed messages

Wed Feb 13, 2013 8:40am EST
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* Bank of England's King: Take G7 statement at face value

* Chides "so-called officials" for off-record briefing

* G20 chair Russia says important Japan hasn't intervened in FX

By Clare Hutchison and Lidia Kelly

LONDON/MOSCOW, Feb 13 (Reuters) - A Group of Seven statement designed to cool international currency tensions should be taken at face value and anonymous officials should not try to reinterpret it, the Bank of England's chief said on Wednesday.

Currency markets were thrown in to turmoil on Tuesday after a day of mixed messages about exchange rates, prompted by Japan's new government pressing for an aggressive expansion of monetary policy, which has seen the yen weaken sharply.

G7 nations - Britain, the United States, Japan, Germany, France, Italy and Canada - said fiscal and monetary policies must be directed at domestic economies and not at targeting exchange rates.

Japan quickly said the statement - released by Britain which chairs the G8 grouping (G7 plus Russia) this year - gave it a green light to continue efforts to reflate its economy.

But a G7 official responded by saying it was aimed squarely at Tokyo, a comment that prompt the yen to surge on a volatile foreign exchange market.   Continued...