Businessweek: World ‘Plunges Into Currency War’
By Dan Weil
Friday, 25 Jan 2013
Many government officials around the world are concerned that massive monetary easing in numerous nations is sparking a global currency war.
Governments from Germany, to Russia, to Brazil, to Thailand have expressed worry that the world is plunging into a currency war, Bloomberg Businessweek reports.
The current focus is on Japan, where the central bank this week announced it would increase its quantitative easing and also set a target of 2 percent for inflation.
Before the Bank of Japan even revealed its policy, Bundesbank President Jens Weidmann warned Japan against politicization of monetary policy that would lead to a weaker yen.
“A consequence [of government pressure to ease], whether intended or not, could lead to an increasingly politicized exchange rate. Until now, the international monetary system has come through the crisis without a race to devaluation, and I really hope that it stays that way.”