Belgian Finance Minister Mark Eyskens warmly welcomed this weeks increase in U.S. Prime rates calling it a move that went beyond the Group of Five and Canada Paris accord on stabilising currencies. The rate rise would underpin economic and financial policy convergence among major countries he added. In an interview withs Eyskens also made clear he believed the countries involved in the accord -- the U.S. Japan West Germany France Britain and Canada -- had agreed tentative fluctuation ranges for exchange rates. Eyskens was speaking before hosting an informal meeting of European Community finance ministers and central bank chiefs in Belgium this weekend focusing on the international monetary situation and proposals for strengthening the European Monetary System (EMS). Asked about the dollars recent fall on currency markets Eyskens said he believed the Paris agreement was proving more or less workable despite what he called evident disagreements over U.S. Economic and monetary policy between Treasury Secretary James Baker and Federal Reserve Chairman Paul Volcker. Besides Bakers public statements that had dramatically influenced exchange markets trade tensions between the U.S.And Japan had also caused the dollars fall expecially against the yen he said. But he expressed optimism that Washington and Tokyo could reach a compromise in their row over semi-conductor trade. I think agreement is quite possible he said. Eyskens said he was very agreeably surprised by this weeks quarter-point increase in U.S. Prime rates despite the obvious negative consequences for debtor countries. It is a positive element which goes further than the (Paris) Louvre agreement ...It is the market taking account of its content he said. He added that coordination of interest rates was a fundamental element of economic and monetary convergence between leading industrialised economies. A policy of maintaining exchange rates within fluctuation ranges is not possible if it is not accompanied at least by a more coordinated policy of interest rates he said.
BELGIUM SAYS U.S PRIME RISES WILL AID CURRENCIES