IMF calms currency row

09:15, October 11, 2010      

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The world's top finance officials wrapped up three days of talks in Washington Sunday after failing to reach a consensus on measures to head off what some see as a looming currency war.

The International Monetary Fund steering committee, which has been struggling to address friction among key economies, including China and the United States, said Saturday that the organization should continue its study.

"While the international monetary system has proved resilient, tensions and vulnerabilities remain as a result of widening global imbalances, continued volatile capital flows, exchange rate movements and issues related to the supply and accumulation of official reserves," the IMF panel said in a statement after its meeting Saturday. "We call on the Fund to deepen its work in these areas, including in-depth studies to help increase the effectiveness of policies to manage capital flows."

The statement from the International Monetary and Financial Committee, the policy arm of the IMF, stopped short of any specific call on China or others to change policies of using a low currency and accumulation of reserves to boost exports.

IMF Managing Director Dominique Strauss-Kahn, when asked about the lack of a stronger statement, said, "There is only one obstacle, and that is an agreement of the members."

The final communique appeared to be a setback for the United States. It had urged the IMF to be a tougher cop on exchange rate policies, a position echoed by a number of Europeans and other officials.

Japanese Finance Minister Yoshihiko Noda told the panel earlier that "it is not sustainable that certain countries achieve growth while imposing costs on other countries."

China's top central banker, Zhou Xiaochuan, on Friday rejected demands for a quick yuan revaluation, declaring that the emerging giant would reform gradually rather than engage in "shock therapy."

Other participants at the IMF downplayed the notion of a currency war.

"I don't think there is a war," French Finance Minister Christine Lagarde said. "In a war, there is always a loser, and we cannot have a loser."

Meanwhile, European Central Bank chief Jean-Claude Trichet said he saw reason for optimism.

"I have full confidence that the international community will find the appropriate ways to cooperate," Trichet said at the close of talks.

Trichet also minimized the rift between the emerging and developed economies over currency, saying a consensus had been expressed and adopted by the Group of 20, including China, in June.

He said participants understood that "we have a shared responsibility" to avoid excessive exchange rate volatility or imbalances.

Source: Global Times

(Editor:黄蓓蓓)

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