The continued weakness of the euro, which hit a record low on financial markets this week, will not trigger an early rise in interest rates, according to the president of the European Central Bank (ECB), Mr Wim Duisenberg.

But the bank may act if the currency's performance does not improve in the longer term as Europe's economy continues to recover.

Speaking in Frankfurt yesterday after a meeting of the governing council of the ECB, Mr Duisenberg stressed that the exchange rate was one of the criteria on which monetary policy decisions are taken.

"It will be watched closely but by itself it will not trigger a monetary policy reaction. I would become concerned if the future strength of the euro were not to materialise over time. "But these things always take time," he said.

Citing an EU forecast that the euro zone would overtake the US in terms of economic growth within two years, Mr Duisenberg expressed confidence that the euro would regain ground against the dollar.

"The expectation that growth differentials between the main economic regions will narrow in the course of time is widespread," he said.

Some analysts blame Mr Duisenberg himself for the recent fall in the euro's value, claiming that he has appeared too relaxed about the exchange rate.