FRANKFURT — Mario Draghi, the president of the European Central Bank, directed unusually sharp criticism at Steven Mnuchin, the United States Treasury secretary, on Thursday, effectively accusing Mr. Mnuchin of violating agreements among nations against starting currency wars.
Mr. Draghi, speaking at a news conference here, said he objected to “the use of language in discussing exchange rate developments that doesn’t reflect the terms of reference that have been agreed.” He then quoted from an agreement reached in Washington in October under which countries promised to “refrain from competitive devaluations.”
Mr. Draghi did not mention Mr. Mnuchin by name, but he was clearly referring to the Treasury secretary’s remarks on Wednesday at a World Economic Forum panel in Davos, Switzerland, that a weaker dollar was good for United States trade. The comment was interpreted as an effort to talk down the dollar, which would breach the international nonaggression pact on currency rates.
On Thursday, Mr. Mnuchin told reporters in Davos that his comment had been misunderstood.
“I thought it was actually balanced and consistent with what I’ve said before,” he said, “which is we’re not concerned with where the dollar is in the short term. It’s a very, very liquid market and we believe in free currencies. And that there’s both advantages and disadvantages of where the dollar is in the short term.” (After arriving in Davos, President Trump said during an interview that he wanted “to see a strong dollar” and that Mr. Mnuchin’s remarks had been misinterpreted.)
Central bankers usually refrain from rhetorical fisticuffs with government officials, but Mr. Mnuchin’s initial remark arrived at a sensitive time for the eurozone.
