ECB’s Villeroy: ‘Not Yet’ in Currency War, But There is a Threat of a Trade War

16 May 2025

ECB’s Villeroy: ‘Not Yet’ in Currency War, But There is a Threat of a Trade War
François Villeroy de Galhau, governor of the Banque de France, at the European Central Bank Forum on Central Banking in Sintra on July 2, 2024. Photo by the ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Friday that we were not yet in a currency war, but that there was a threat of a trade war.

In an interview with French regional newspapers L’Alsace and L’Est Républicain, Villeroy, who heads the Banque de France, said that ‘[t]here is unfortunately a threat of a trade war, but a currency war would be a situation where each country is very actively using its exchange rate to try to gain an economic advantage.’

‘We are not there yet’, he added.

Currency moves were a consequence of revisions to the economic outlook, he said.

‘On this point, to date, the Trump administration's intentions are less clear’, he said. ‘As for the yuan, we do not see any abnormal monetary behaviour by the Chinese authorities today.’

 

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