- Military given ‘execute order’ by Obama for secret cyber mission in June
- College group’s diversity event canceled after excluding white people
- Cops: 2 shoot up heroin as kids play at McDonald’s
- Drug charges against husband of Va. daycare owner
- USS Kidd sent to Indian Ocean after ‘indication’ of Malaysian jet crash
- Vertical Group trader jumps in front of commuter train: report
- Brazilian goalkeeper who ordered girlfriend’s murder may be released to play soccer
- Harlem explosion death toll rises to 7; some still missing
- 2 dead, 23 hurt when driver plows into SXSW crowd
- Gaza militants offer Israel cease-fire of rocket blasts
End to currency dispute eludes finance ministers
WASHINGTON (AP) — Differences that threaten the outbreak of a currency war persisted after a weekend meeting of global finance ministers, who left without resolving what to do.
They did agree, however, that the 187-nation International Monetary Fund was the organization best suited to deal with rising global currency tensions that risk overshadowing next month’s summit meeting of the Group of 20 nations in South Korea.
Various nations are seeking to devalue their currencies as a way to increase exports and jobs during hard economic times. The concern is that such efforts could trigger a repeat of the trade wars that contributed to the Great Depression of the 1930s as country after country raises protectionist barriers to imported goods.
The International Monetary Fund ended two days of talks Saturday with a communique that pledged to “deepen its work” in the area of currency movements. This plan included giving the head of the IMF, Dominique Strauss-Kahn, a mandate to operate as judge, arbiter and analyst in dealing with the main players in the currency dispute, the United States, the eurozone, China and Japan.
Noting the potential for broader ramifications, Ms. Lagarde added, “In a war, there is always a loser, and in this situation there must not be a loser.”
The Obama administration, facing November elections at which high U.S. unemployment will be a top issue, has been pressing China to move more quickly to allow its currency to rise in value against the dollar.
American manufacturers contend the Chinese yuan is undervalued by as much as 40 percent, and this undervaluation has cost millions of U.S. manufacturing jobs by making Chinese goods cheaper in the United States and U.S. products more expensive in China.
China has allowed its currency to rise in value by about 2.3 percent since announcing in June that it would introduce a more flexible exchange rate. Most of that increase has come in recent weeks after the Obama administration began taking a more hard-line approach and the U.S. House passed tough legislation to impose economic sanctions on countries found to be manipulating their currencies.
Chinese officials continued to insist that their gradual efforts to revalue their currency was the best approach to take.
“China will move the exchange rate gradually,” Zhou Xiaochuan, head of China’s central bank, said during a panel discussion Friday. “We will do it in a gradual way rather than shock therapy.”
Chinese officials have said that allowing the currency to rise too rapidly would cost thousands of manufacturing jobs and destabilize the Chinese economy.
China is hardly alone in trying to gain a competitive advantage by using its currency.
The United States is contributing to a weaker dollar by pressuring Beijing and by the Federal Reserve flooding the markets with U.S. dollars.
The Japanese government intervened in currency markets for the first time in years on Sept. 15. It sold yen and bought dollars to push the yen’s value lower. And this week, the Japanese central bank announced that it would pursue a policy similar to the Fed’s: buy assets to lower Japanese interest rates, another way to lower the yen’s value.
Egyptian Finance Minister Youssef Boutros-Ghali told reporters Saturday at a concluding IMF news conference that despite “a number of points of friction” it was significant that all countries recognized the central role of the IMF in trying to resolve currency conflicts.
“We can talk and talk and talk,” Mr. Strauss-Kahn told reporters about the outcome of the two days of meetings. “What we need is real action. I don’t believe this action can be done except in a cooperative way.”
TWT Video Picks
By Emily Miller
Obama is losing the debate on gun ownership, concealed-carry permits
- Oil rig worker says he saw missing plane go down: report
- USS Kidd sent to Indian Ocean after 'indication' of Malaysian jet crash
- F-35 secrets now showing up in Chinas stealth fighter
- NRA shirt gets N.Y. high school student suspended
- Ben Carson: America's now 'very much like Nazi Germany'
- MILLER: Law enforcement realizes good people with guns deter crime
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- Redskins' secondary holes remain unfilled amid NFL free-agent frenzy
- GOP bill tries to pull courts into fight with Obama on executive power, enforcing laws
- Critics point to Obama's attempts to sell health care as no laughing matter
Chaos as Manhattan building explodes
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again