World’s powers must head off threat of currency war
The world’s major economic powers must do more to head off the prospect of a global currency war, a body representing the world’s financial institutions has warned.
By Richard Blackden
04 Oct 2010
The call from the Institute of International Finance (IIF) comes as finance ministers and central bankers prepare to descend on Washington DC for the annual meeting of the World Bank and International Monetary Fund against a backdrop of rising tensions over foreign-exchange policy.
Every corner of the world is now beset by its own currency battle, as countries compete for a slice of a global recovery that’s proving far more robust in major emerging economies than in the West.
In the US, there’s widespread anger on Capitol Hill at China’s determination to keep the strength of the yuan on a tight leash.
Last month Japan took on foreign-exchange traders on its own for the first time in six years to protect the country’s exporters from the rising yen.
Brazil and Switzerland have each intervened to weaken their currencies, while the Bank of England has encouraged the pound to weaken