Francois Villeroy de Galhau, Governor of the Banque de France, attends the Paris Europlace International Financial Forum in Paris, France, on July 12, 2022. REUTERS/Benoit Tessier/File Photo
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PARIS, Sept 27 (Reuters) – Policymakers must be cautious to avoid uncertainty shaking financial markets and boosting volatility, France’s central bank governor Francois Villeroy de Galhau said on Tuesday.
While recent volatility in markets could be partly explained by inflows into the dollar due to its safe haven status, Villeroy also highlighted the UK government’s announcement last week of plans for a “huge” budget deficit, prompting a spike in UK interest Prices.
“It is important not to add uncertainty to the uncertainty and stay the course,” Villeroy told lawmakers at the Finance Commission in France’s National Assembly.
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That means, he said, maintaining a focus on price stability in relation to European monetary policy and fixing French fiscal policy on spending targets and deleveraging over time, while aligning internationally.
“Going it alone is counterproductive,” added Villeroy.
His concerns echoed comments Monday from a senior Federal Reserve official, Atlanta Fed President Raphael Bostic, who told the Washington Post that the UK’s new fiscal plans risked worsening economic stress in Europe and the United States strengthen. Continue reading
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Reporting by Leigh Thomas, editing by Tassilo Hummel
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