Ministers complain Fed's quantitative easing

08:44, November 08, 2010      

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A group of G20 financial ministers said over the weekend that they are "awed" by U.S. Federal Reserve's pumping an extra $600 billion into the monetary system, vowing to take the issue to the impending summit meeting in Seoul this week.

"With all due respect, U.S. policy is clueless," Wolfgang Schäuble, German finance minister, told reporters. "It's not that the Americans haven't pumped enough liquidity into the market," he said. "Now to say let's pump more into the market is not going to solve their problems."

Pravin Gordhan, finance minister of South Africa, a key member of the emerging economies, said the U.S. decision "undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current financial crisis", and ran counter to the pledge made by G20 finance ministers to refrain from uncoordinated responses.

Cui Tiankai, a deputy foreign minister of China, said Friday that "the question of quantitative easing" by the U.S. Fed "merits more attention" at the G20 summit meeting than other issues.

Government officials from Germany, China, South Africa and others are worried that the Fed's return to pumping more liquidity to the market would create financial instability by weakening the U.S. dollar further, and might cause a global round of competitive currency devaluations that will harms trade.

The U.S. Treasury Department declined to comment Friday.

By People's Daily Online


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