Saturday, 9 October 2010

What currency war?

The following comes from the Nasdaq website as the IMF meeting in Washington appears to be failing to agree on a resolution to address the accusations that there is a currency war

China's official Xinhua News Agency on Saturday sought to turn the table on the U.S., accusing it of being the currency manipulator and of threatening the global economic recovery. The Xinhua article, citing officials at government think tanks, pointed to the dollar's 12% fall against the euro since June and recent strength of Brazilian real, the Japanese yen, the Korean won and other currencies and the possibility of Federal Reserve Board quantitative easing measures as evidence that the U.S. purposely weakens its currency indirectly. "The U.S. not only manipulates the dollar's exchange rates, it also manipulates other countries' exchange rates," Xinhua quoted Cao Honghui, a division chief at the Chinese Academy of Social Sciences, as saying. Chinese scholars have made such accusations before whenever China's currency manipulator status is being discussed in the U.S., but this fresh accusation comes as the yuan valuation issue is at the center of attention during the IMF/World Bank meetings in Washington.

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