	poehl says rate rises are cause for concern rises in west german and international  rates are a cause for concern and the bundesbank has no  in higher capital market rates bundesbank president karl otto poehl said we consider the  rate increase that has occurred here and internationally to be a problem and cause for concern poehl told an investment conference i would like to stress that the bundesbank has no  in higher capital market rates he said shortly after poehl spoke the bundesbank announced a tender for a securities repurchase pact at a fixed rate of pct previous tenders over the last month by  rate have seen the allocation rate on these facilities rise to pct at last week s pact from on the last fixed rate tender in late september the bundesbank s reduction of the key allocation rate to from pct was heralded monday by repeated injections of money market liquidity at between and pct these moves to cap  rates followed a meeting between poehl finance minister gerhard stoltenberg and u s treasury secretary james baker monday in frankfurt officials said afterwards the three men had reaffirmed their commitment to the louvre accord on currency stability over the weekend criticism by baker of the tightening in west german monetary policy had prompted a sharp fall of the dollar on speculation that louvre cooperation had ended but the dollar rallied on news of monday s meeting in nervous trading to trade above marks tuesday poehl said that the recent rise in  rates was not due to central bank policy but to markets expectations and currency developments commenting on the inflationary expectations poehl said you have to get to the root of the problem you have to pursue a policy which reveals that there are no grounds for such fears the inflationary fears were unjustified and exaggerated he said poehl rebuffed recent u s criticism of west germany saying the bundesbank had made a substantial contribution to international cooperation in  and monetary policy the bundesbank has tolerated an overshooting of its money supply target arousing criticism from other quarters he said today we still have lower  rates than at the end of quite the contrary of other countries where  rates have risen substantially more poehl said this had to be taken into account when considering recent rises in repurchase pact allocation rates which were due to rising international money market rates that had spilled over into the german market he said poehl expressed surprise that financial markets had so far ignored improvements in the u s deficits the adjustment process in the u s trade balance is definitely underway he said noting that this was not so noticeable in absolute figures the spectacular improvement in the budget deficit had also attracted little attention he said reuter 
