To: Ahda who wrote (37 ) 9/26/2000 3:51:40 PM From: ahhaha Read Replies (1) | Respond to In the end, the central banks almost certainly could turn around the euro if they were truly determined. If the ECB spent billions of dollars daily for week after week, the forced sellers would finally be exhausted and the currency would probably start to rise. But will the ECB show such persistence? And if the ECB were truly determined to make the euro recover, why not try a different approach? Why not simply allow the European economy to grow faster by keeping interest rates lower? This would pull private capital back into Europe and buoy the currency up. Rapid growth is surely a better, and more plausible, solution to euro weakness than bigger and bigger currency intervention. By choosing the intervention route, the ECB risks failure. And failure could provoke a further loss of confidence, a panic-stricken rise in interest rates and even lower European growth. This is the new cloud on the global economic horizon.
