Several governments are said to be in the process of manipulating their exchange rates to improve the growth of their economies and it is feared that tariff barriers could soon be introduced.
Mr Lamy told the Guardian that while an anti-protectionist mood is generally in existence, there is a risk this could be destabilized by currency developments.
"What should be avoided is a domino effect, where you get a beggar-my-neighbor, or tit-for-tat, chain and it sours and sours," the WTO chief warned.
In recent weeks, China has been criticized by the US for allegedly undervaluing the yuan in order to aid the performance of its exporters at the expense of international rivals.
White House spokesman Robert Gibbs has called on the Chinese to "take steps" to tackle the issue, reported BBC News.
By Gary Cooper