	transatlantic row imperils louvre accord dealers the louvre accord on currency stability which has maintained an uneasy calm in currency markets since last february appeared in serious danger today as a transatlantic dispute over west german interest rates came to the boil foreign exchange dealers said but as the dollar slid against the mark and world stock and bond markets plunged officials in the major industrial countries played down the dispute as a bilateral problem between the united states and west germany and insisted that the currency pact was still alive u s treasury secretary james baker sparked the market fears when he attacked the rise in west german short term interest rates that s not in keeping with the spirit of what we agreed to as recently as earlier this month in washington baker said in a u s television interview on sunday he was referring to the meetings of finance ministers from the group of seven g leading industrial nations which reaffirmed the pact under the louvre accord west germany and japan who both have large trade surpluses pledged to boost their economic growth to take in more exports from the u s while the u s agreed to stop talking the dollar down however baker said on saturday that while the louvre agreement was still operative the west german interest rate move would force the u s to re examine the accord the foreign exchange market has been told by baker that he s going to hammer germany he has just declared all bets are off in terms of currency cooperation chris johns currency analyst at ubs phillips and drew in london said but a bank of japan official took a much more sanguine view telling reuters that the exchange market is apparently reacting too much and anyone who sold the dollar on the baker comment will regret it later on french finance minister edouard balladur who hosted the louvre meeting was the only one of the g finance ministers to respond directly to baker s remarks he called for a faithful and firm adherence by all the major industrial countries to the louvre accords in both their letter and spirit neither the west german finance ministry nor the british treasury commented on the row but a japanese finance ministry official said that despite u s frustration over higher interest rates abroad this does not represent its readiness to scrap the basic framework of the louvre accord in frankfurt f wilhelm christians joint chief executive of west germany s largest bank deutsche bank said that following recent meetings with baker he believed that the u s was still committed to the accord in a move which the market interpreted as a possible gesture of reconciliation the bundesbank added short term liquidity to the west german money market at pct on monday down from the pct level at which it injected medium term liquidity last week the bank of france also stepped into the french money market to hold down rates injecting short term liquidity at pct after rates rose close to eight pct reuter 
