Soros: ECB stimulus will rile currency markets

Currency market players 'would see opportunities' in central bank's measures, billionaire currency investor warns.

Soros: ECB stimulus will rile currency markets

World Bulletin / News Desk

Billionaire investor George Soros has warned the European Central Bank's recently proposed stimulus measures will disrupt currency markets.

Soros, who is widely regarded as having caused the devaluation of the British pound in 1992, told delegates at the World Economic Forum in Davos on Friday: "If I were still a market participant, I would see opportunities."

Soros also warned that the ECB's quantitative easing policy, in which the central bank will spend €60 billion ($69.9 billion) per month to increase the money supply with purchases of securities, could create an asset bubble.

Soros said: "Asset prices will rise, and the wealthy will profit at the expense of the poor."

"This will increase inequality between rich and poor. There will be political consequences."

- 'No panacea'

The ECB unveiled the $1 trillion stimulus program on Thursday amid criticism it could trigger spiraling inflation within the EU bloc.

Speaking in Davos, International Monetary Fund Managing Director Christine Lagarde hailed the move as "effective" while Harvard economist Lawrence Summers warned it "would not be a panacea".

Currency speculator Soros reportedly made more than £1 billion ($1.5 billion) in profit by short-selling sterling during Britain's European Exchange Rate Mechanism crisis.

The U.K. Treasury later estimated the cost to the country of "Black Wednesday" was about £3.4 billion.

Last Mod: 23 Ocak 2015, 15:33
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