IMF policymakers failed to reach a consensus on measures to head off what some see as a looming currency war but pledged to keep working toward easing global economic imbalances." g- F6 I7 y5 ]: F: V. D. m
The International Monetary Fund steering committee, which has been struggling to address friction among key economies including China and the United States, said the organization should continue its study.
& z, f; ^- R9 j) ]' C+ d) b "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.
0 V" A( I! b' A8 S* o+ n" } "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."5 R4 C7 b. @) f9 h
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.
* Q4 W" m5 D3 J+ F' y "There are frictions, obviously," committee chair Youssef Boutros-Ghali said at the conclusion of talks at IMF headquarters in Washington.- P3 d; `) c" w% L1 [) U, ^" `7 j% j
"These are being addressed. We have come to the conclusion that the IMF is the place to deal with these issues."
( E0 X8 _ W3 ^ 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."
" x9 O0 @0 u6 u+ c6 X2 k He added, "I don't believe action can be done in a way other than in a cooperative way."
4 }3 [# D; F- K: h) p US Treasury Secretary Timothy Geithner said earlier in the day that the IMF "must strengthen its surveillance of exchange rate policies and reserve accumulation practices," adding that "excess reserve accumulation on a global scale is leading to serious distortions in the international monetary and financial system."2 P; E& O$ B; c
Recent IMF figures showed Beijing had currency reserves of 2.447 trillion dollars, the largest in the world and nearly 30 percent of the global total.
0 Y2 a& q1 ^7 @; [ Washington maintains that China purchases large amounts of dollars to keep the yuan artificially low, which distorts global trade by boosting Chinese exports.
. }/ |7 ]" A7 H, ~6 @5 r 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.
1 x6 _. b8 }* [: ]* C* V0 d4 Y# F Japanese Finance Minister Yoshihiko Noda told the panel earlier thagradually t "it is not sustainable that certain countries achieve growth while imposing costs on other countries. Now it is critical that the international society work together to resolve these problems."9 ?, r$ R) Q1 K" M: o- G+ b* ?
The finance ministers and central bankers from the IMF's 187 member states, including the G20, met in the US capital hoping for a consensus on the thorny question of currency policies./ U' x4 J. @6 x; e2 @1 u: b
But China's top central banker Friday rejected demands for a quick yuan revaluation, declaring that the emerging giant would reform gradually rather than engage in "shock therapy."9 q* P, S1 Y. T2 @) a6 g
Central bank governor Zhou Xiaochuan said the yuan would move toward an "equilibrium" level.
|+ _& ]) V7 C- }# N Other participants at the IMF downplayed the notion of a currency war.0 O% h" V/ v5 N; X6 C
"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."- }* M5 G1 }% X) G1 r* ?
She added that the IMF "is precisely the place to find cooperation and common ground."4 f1 W$ i, g5 E3 e, c6 i( v# B
European Central Bank chief Jean-Claude Trichet said meanwhile he saw reason for optimism.
0 I/ }- f9 Z# F/ O; S "I have full confidence that the international community will find the appropriate ways to cooperate," Trichet said at the close of talks.
+ m: t* `0 g, ~1 l "We are very, very hostile to any so-called currency wars."2 g- M% n0 H$ {3 q2 X1 y
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Trichet minimized the rift between the emerging and developed economies over currency that appeared to emerge, saying a consensus had already been expressed and adopted by the Group of 20, including China, in June. |