Last week's intervention in the currency markets to boost the euro helped to limit the risk of currency instability for the world economy, the managing director of the International Monetary fund (IMF), Mr Horst Kohler, said yesterday.

Speaking in Prague after the IMF ended its annual meeting a day earlier than planned, he said that the intervention had enhanced the authority of the European Central Bank (ECB).

"I think it was right that the ECB intervened. Interventions are no panacea for solving everything, but the intervention demonstrated the maturity of the ECB as an institution. "This should make markets clear that there is an institution in command of the currency, the euro, and I think all in all this should have diminished the risk for the global economy. The future external value of the euro will depend, nevertheless, on further steps, decisions taken in Europe to accelerate structural change, to make growth here stronger, and on this basis convince markets that it is worthwhile to go into the euro," he said.

Prague was returning to normality yesterday after two days of violent confrontations between anti-globalisation activists and Czech police. The protesters claimed a victory on Wednesday when the IMF and the World Bank decided to wrap up their meeting a day ahead of schedule.

But the World Bank's president, Mr James Wolfenssohn, denied that the protesters had won a victory and said the two institutions had fulfilled their aim of discussing global issues, including the fight against poverty.

"I believe that the legitimate voices of people that were concerned and who came to dialogue were in fact enormously damaged by the groups that sought violence," he said.

Anti-debt campaigners remain disappointed by the pace of debt reduction.

Mr Kohler said that the IMF's 182 member countries agreed that the fund should be reformed and its activities streamlined. Markets should be opened to get goods and services from the developing world to industrial countries, he said.

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