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Developing Asia should help bear pain: IMF
Dubai, Sept 19: The US dollar may be in for further weakness and developing Asia is better equipped than Europe or Japan to bear the economic pain of its fall, the International Monetary Fund said on Thursday.
Dubai, Sept 19: The US dollar may be in for further weakness and developing Asia is better equipped than Europe or Japan to bear the economic pain of its fall, the International Monetary Fund said on Thursday.
The Washington-based global lender added its voice -- albeit cautiously -- to a chorus of European and US officials by saying developing Asian countries should move to free up exchange rates.
In its semi-annual World Economic Outlook, the IMF said currency flexibility in developing Asia would cut the risk of future crises in the region, make domestic growth less subject to global economic fortunes, lower the carrying cost of official reserves and boost local buying power.
Top European finance chiefs last weekend urged China -- and Japan, which has intervened markets to keep its yen from rising -- to stop holding foreign exchange rates artificially low but there were signs on Wednesday that the European Central Bank wanted to reduce some of the pressure on China.
Sources said ECB president Wim Duisenberg wanted to turn the spotlight back on to the United States, leader of a high-profile campaign for China to float the yuan, and get America to tackle its gigantic trade and budget deficits.
Bureau Report
In its semi-annual World Economic Outlook, the IMF said currency flexibility in developing Asia would cut the risk of future crises in the region, make domestic growth less subject to global economic fortunes, lower the carrying cost of official reserves and boost local buying power.
Top European finance chiefs last weekend urged China -- and Japan, which has intervened markets to keep its yen from rising -- to stop holding foreign exchange rates artificially low but there were signs on Wednesday that the European Central Bank wanted to reduce some of the pressure on China.
Sources said ECB president Wim Duisenberg wanted to turn the spotlight back on to the United States, leader of a high-profile campaign for China to float the yuan, and get America to tackle its gigantic trade and budget deficits.
Bureau Report