Ireland devalues its pound – nytimes.com verizon troubleshooting number

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Ireland this weekend gave up its fierce battle to maintain the strength of its currency, handing another big victory to speculators and leaving Europe’s battered monetary system facing another test of its ability to survive.

The devaluation of the Irish pound, announced late on Saturday in Brussels after an emergency meeting of European Community monetary officials, brought to 5 the number of major European currencies — there are 10 altogether — that have been devalued or taken out of the Exchange Rate Mechanism since September.

"Every time another currency devalues it draws attention back to the underlying problems in the E.R.M.," said Nigel Gault, an economist with DRI/McGraw Hill in London. "People ask, who’s next?"

The fate of the French franc in particular has become synonomous with questions about Western Europe’s ability to maintain its path towards further economic and political unification.


France and Germany, the cornerstones of the European Community, have pledged to do whatever is necessary to maintain the franc’s value within the agreed-upon exchange rate band with the mark and have worked together several times in the last five months to repulse speculative onslaughts usd aud calculator. The Bundesbank has intervened in currency markets to defend the franc on a scale that it has not offered to other embattled currencies, a fact noted today with some bitterness by Bertie Ahern, Ireland’s Finance Minister us stock market futures today. A ‘Franc Fort’ Policy

In France, the Government of President Francois Mitterrand has steadfastly pursued a "franc fort" policy, refusing even to consider, at least publicly, the possibility of devaluation gender roles articles. But with French economic growth slowing and the impact of high interest rates biting more deeply, there is bound to be greater debate over monetary policy leading up to national elections in France next month.

A minority of French economists has been urging France to follow the lead of Britain, which left the monetary system in September and, freed of the need to maintain the pound’s value, cut interest rates sharply, to 6 percent from 10 percent, in an effort to energize its economy.

The great hope for the franc is that the Bundesbank, having seen Germany slip into recession, will decide soon that the risk of inflation has eased and that the German economy can safely handle the stimulus of lower rates.

The magnitude of the Irish pound’s devaluation — 10 percent, the biggest of any currency in the five-month currency crisis — means that investors who had been betting heavily on a fall in its value will earn large profits.

Economists said that speculators — who sell weak currencies, betting that they will drop even further in value, and buy strong ones, betting that they will increase — are now almost certain to try for additional profits by attacking what they see as the most vulnerable of the remaining currencies in the Exchange Rate Mechanism, the French franc and the Danish krone.

Germany’s assistance to France, however, has not included a reduction in its benchmark interest rates, although the Bundesbank has eased credit slightly through other technical steps used book stores las vegas. High German interest rates, which have kept the mark extremely strong, have been the primary cause of the currency instability gold price today kitco. Vulnerable to Speculation

Economists said the franc would remain vulnerable to speculation and devaluation as long as France was forced to keep its rates high to maintain the franc’s strength against the mark famous quotes about time. The Bundesbank’s discount rate is 8.25 percent usd jpy rate. The equivalent rate in France is 10 percent, and in the United States, which does not seek to keep the dollar at any particular level of strength, the discount rate is 3 percent.

"The Germans have done just enough to hold the link with the franc," Mr funny jokes for adults short. Gault said. "Economically and politically that link is very important, and Germany is not going to let go of it without a major battle."

"The perceptions of Germany’s interest rate policies over the next few weeks," he added, "will be extremely important in determining whether we get an attack on the franc and how much pressure the markets see."

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