BRUSSELS, May 18 (Reuters) - Eurogroup Chairman Jean-Claude Juncker sought to reassure markets on Tuesday that despite a sharp fall, the euro was a credible currency and the European Central Bank would ensure inflation remained under control.
Markets have been selling the euro on concern that euro zone austerity measures will damage economic growth in the 16-country currency area. The austerity steps are a reaction to market fears about the risk of a debt default in some euro states.
Some economists also have said that while the euro zone's 750 billion euro ($924 billion) safety net for the debt obligations of its members solved near-term insolvency risk, it did not resolve the longer-term problem of huge public deficits.
The euro
"The euro is a credible currency," Juncker, who chairs monthly meetings of euro zone finance ministers, told a news conference after their talks ended in the early hours of Tuesday morning.
He told reporters on Monday: "I'm not worried as far as the euro exchange rate is concerned. I'm worried as far as the rapidity of the fall is concerned."
Some market participants are also concerned that the ECB started buying government bonds on the secondary market as part of the euro zone safety net, in what many said amounted to monetising government debt.
They have criticised the move as a step too far that could create inflation dangers by expanding the money supply.
But Juncker added that the ECB, which has said it would start sterilising the bond purchases next week to avoid increasing money supply, had a good track record in preserving price stability and would continue to do so.
"Price stability has been fully maintained and will be maintained in the future," Juncker said.
"This is a major feature of the euro and a major asset for investors," he said. (Reporting by Jan Strupczewski, editing by Dale Hudson)