ECB head says talk of currency war is 'overdone'

European Central Bank chief Mario Draghi on Tuesday said talk of a "currency war" between big economies was "way overdone", after the G7 group of major powers warned of foreign exchange volatility.

"I think the term 'currency war' is way, way overdone. We are not witnessing anything like that," Draghi told a news conference in Madrid after meeting with members of the Spanish parliament.

The Group of Seven top industrialised nations said on Tuesday that "excessive volatility" in exchange markets undermines stability, in a statement by current G7 president Britain.

Japan's recent monetary easing has stoked fears, especially in Europe, of a "currency war" between the major economies as policymakers seek to devalue their currencies to make exports more competitive.

"You can see from the statement there is no declaration of currency war," Draghi said, referring to the G7 declaration.