Jan. 28 (Bloomberg) -- European Central Bank council member Nout Wellink said he doesn't see a need to slow the euro's rise against the dollar and ``further developments'' are required before the bank decides whether to act.

``We haven't been and we aren't of the view that we should do something,'' Wellink, who sits on the council as president of the Dutch central bank, told Bloomberg News in an interview yesterday in Toronto. ``As long as exchange rates don't go too fast, there's the possibility for our economies to absorb the negative and positive consequences.''

His comments go a step further in ruling out immediate relief for exporters hurt by the euro's 16 percent gain in five months. Last week, Wellink said a rate cut wouldn't be effective in halting the euro's ascent and yesterday ECB board member Gertrude Tumpel-Gugerell said the bank isn't considering one.

The central bank isn't ``indifferent'' to the effect of the euro's surge and is monitoring the situation ``more closely'' than in past, Wellink said. He declined to provide any detail on what ``further developments'' would trigger ECB action.

Since soaring to a record $1.2899 earlier this month, the euro has dropped, trading between $1.2335 and $1.2797. Today, the currency fell to $1.2601 at 8:12 a.m. in Frankfurt from $1.2646 late yesterday in New York, according to EBS prices.

Lagging Growth

Companies such as BASF AG and Volkswagen AG record less revenue and profit on sales in U.S. dollars because of the euro's jump. A poll of business confidence in Germany, where both companies are based, suggested yesterday executives there are confident they'll overcome the effects of the currency's gain.

Not all corporate leaders in Europe are as optimistic. Michael Rogowski, whose BDI lobby group represents 107,000 German companies, said Monday that the ECB should cut rates as much as half a percentage point to help Germany's economy weather the damping effect of the euro's rise on growth.

The economy of the dozen nations using the euro will probably grow 1.8 percent this year, compared with 1.7 percent in Japan and 3.8 percent in the U.S., according to the European Commission.

Wellink, resting a stiff leg on the sofa in his hotel room, echoed recent remarks made by Tumpel-Gugerell and ECB President Jean-Claude Trichet in predicting that European growth is accelerating. He said ECB policy makers would look at the euro's gains differently if the economy were slowing, declining to elaborate on what the central bank would do in that case.

``The downward pressure on exports has been compensated for by more buoyant world trade,'' said Wellink, in Toronto to speak to the Canadian Netherlands Business and Professional Association. ``You should accept that a currency goes through a cycle, that a currency goes up, perhaps in a logical way.''

Wrong Tool

Moreover, the ECB wouldn't turn to interest-rate cuts as its first tool to fight a rising euro, Wellink said, reiterating comments he made in an interview last week. Rate reductions tend to stimulate growth and spark inflation, which the ECB aims to keep below 2 percent.

A so-called intervention, in which the ECB would buy or sell euros to prompt a gain or drop, is ``viable,'' though only if other central banks act in concert as they did in 2000 to halt the currency's slide, Wellink said.

According to Wellink, the euro's gains haven't cut prices of imported goods enough to change the outlook for inflation. The ECB's December forecasts of 1.8 percent inflation and 1.6 percent growth this year are still good, he said.

``All things being equal, you would expect inflation to go down,'' he said. ``But time and time again, our forecasts prove to be on the low side.''

Last Updated: January 28, 2004 02:19 EST