Soaring commodity prices and rising bond yields are not threatening global recovery right now, but top central bankers are on alert, the European Central Bank (ECB) president said today.
After meeting with central bankers from the wealthiest nations and major developing countries, Mr Jean-Claude Trichet said policymakers were vigilant, though optimistic, that the world economic recovery is broadening.
"Steady growth at this stage is not hampered by a rise in commodity prices and oil prices even if we have to remain vigilant in this respect," Mr Trichet said at a news conference held at the Bank for International Settlements.
He called the rise in oil prices "substantial," and welcomed news on Monday that Saudi Arabia is calling for OPEC nations to increase oil production.
. Mr Trichet, who chairs the regular meeting of top central bankers, said they do not see risks to the global economy having increased over the past few months, despite oil prices touching $40 a barrel, political unrest in Iraq, terrorism worries and rising interest rates.
"We are confident that the global economy is confirming its steady growth for this year and next," he said. "We have to remain vigilant for it to be sustained."
Mr Trichet did not discuss the sharp decline in some emerging market currencies over the past few weeks as investors withdraw assets from riskier markets now they see interest rates soon heading higher.