No currency war: IMF official
By Zhang Fengming |
October 19, 2010, Tuesday
|
Print Edition
Print Edition
A senior International Monetary Fund official yesterday tried to damp talk of a global currency war, while China said it will stick to a gradual reform of its currency.
"There's no currency war," John Lipsky, the first deputy managing director of the IMF, said at a briefing in Shanghai after an IMF meeting with financial chiefs from around the world.
Lipsky said he welcomed China's decision in June to allow greater flexibility of its currency.
The Shanghai conference comes ahead of a Group of 20 meeting of central bankers and finance ministers in South Korea this weekend.
Lipsky's dovish remarks may do little to arrest the hawkish war of words among nations trying to use currencies to protect their economic interests.
Emerging countries like Brazil have complained that near-zero interest rates in the United States are driving capital to flow into their markets. At the same time, many Western countries accuse Asian countries of keeping their currencies undervalued to bolster exports.
Lipsky said the policies taken by developed nations should be seen in the context of addressing low growth and low inflation.
The closed-door meeting, hosted by the People's Bank of China, was attended by financial chiefs from Asia, Africa, Europe and the Americas.
The conference was co-chaired by People's Bank of China Governor Zhou Xiaochuan and IMF Managing Director Dominique Strauss-Kahn.
Yi Gang, deputy governor of China's central bank, signaled no major change in China's policies.
"China will continue foreign exchange reform with a market-based mechanism tied to the value of a basket of currencies," Yi said. "One thing I want to underscore is that it will be a gradual process."
Reforming the yuan in this way will make China's monetary policy more effective and help counter inflation, Yi said.
Yao Jian, a Ministry of Commerce spokesman, said on Friday that the yuan has been a "scapegoat" of economic weakness in the US.
The US on Friday delayed publishing a report on whether to label China a "currency manipulator" until after a G20 summit next month.
The delay was widely interpreted as setting up a showdown on the currency issue when President Hu Jintao, US President Barack Obama and other world leaders meet at a summit in South Korea in mid-November.
Any move by the US to label China a "currency manipulator" could open the door for US sanctions on Chinese goods and could escalate trade disputes between the world's biggest two economic powers.
"There's no currency war," John Lipsky, the first deputy managing director of the IMF, said at a briefing in Shanghai after an IMF meeting with financial chiefs from around the world.
Lipsky said he welcomed China's decision in June to allow greater flexibility of its currency.
The Shanghai conference comes ahead of a Group of 20 meeting of central bankers and finance ministers in South Korea this weekend.
Lipsky's dovish remarks may do little to arrest the hawkish war of words among nations trying to use currencies to protect their economic interests.
Emerging countries like Brazil have complained that near-zero interest rates in the United States are driving capital to flow into their markets. At the same time, many Western countries accuse Asian countries of keeping their currencies undervalued to bolster exports.
Lipsky said the policies taken by developed nations should be seen in the context of addressing low growth and low inflation.
The closed-door meeting, hosted by the People's Bank of China, was attended by financial chiefs from Asia, Africa, Europe and the Americas.
The conference was co-chaired by People's Bank of China Governor Zhou Xiaochuan and IMF Managing Director Dominique Strauss-Kahn.
Yi Gang, deputy governor of China's central bank, signaled no major change in China's policies.
"China will continue foreign exchange reform with a market-based mechanism tied to the value of a basket of currencies," Yi said. "One thing I want to underscore is that it will be a gradual process."
Reforming the yuan in this way will make China's monetary policy more effective and help counter inflation, Yi said.
Yao Jian, a Ministry of Commerce spokesman, said on Friday that the yuan has been a "scapegoat" of economic weakness in the US.
The US on Friday delayed publishing a report on whether to label China a "currency manipulator" until after a G20 summit next month.
The delay was widely interpreted as setting up a showdown on the currency issue when President Hu Jintao, US President Barack Obama and other world leaders meet at a summit in South Korea in mid-November.
Any move by the US to label China a "currency manipulator" could open the door for US sanctions on Chinese goods and could escalate trade disputes between the world's biggest two economic powers.
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