Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

South Africa : 20 children killed in a bus crash near Pretoria

Read more

MEDIAWATCH

An Election in the Shadow of Terror

Read more

#TECH 24

How fintech is helping the unbanked

Read more

FRANCE IN FOCUS

Turning up the heat with French firefighters

Read more

THE WORLD THIS WEEK

Champs-Elysées attack: What impact on Sunday's French election? (part 1)

Read more

THE WORLD THIS WEEK

After Brexit and Trump: World waits on French presidential election (part 2)

Read more

REPORTERS

Battle to stop nuclear waste being buried in a French village

Read more

THE CAMPAIGN BEAT

After Champs-Élysées attack, security takes centre stage in election campaign

Read more

PEOPLE & PROFIT

Brexit: Come what May

Read more

Business

US urges review of currency regimes to tackle trade surplus

Text by News Wires

Latest update : 2010-10-22

As G20 finance ministers meet for talks in South Korea, US Treasury Secretary Timothy Geithner urged G20 nations with trade surpluses to review their currency regimes and those with deficits to boost savings and exports for the sake of global growth.

AFP - US Treasury Secretary Timothy Geithner has urged G20 nations running big trade surpluses to alter their currency regimes for the sake of global growth, in a letter seen by AFP Friday.
   
In the letter addressed to other G20 finance ministers attending talks in South Korea, Geithner said nations should aim to reduce their surpluses or deficits to a certain share of gross domestic product in the coming years.
   
G20 nations with large deficits should boost national savings via "credible medium-term fiscal targets" and boost their exports, he said in the letter.
   
"Conversely, G20 countries with persistent surpluses should undertake structural, fiscal and exchange-rate policies to boost domestic sources of growth and support global demand," Geithner wrote.
   
The letter did not name any specific countries, but the United States is angry at China's policy of keeping a lid on the yuan's value to benefit Chinese exporters, and his proposals appeared squarely aimed at Beijing.
   
Geithner said "G20 countries should commit to refrain from exchange-rate policies designed to achieve competitive advantage by either weakening their currency or preventing appreciation of an undervalued currency".
   
"G20 emerging market countries with significantly undervalued currencies and adequate precautionary reserves need to allow their exchange rate to adjust fully over time to levels consistent with economic fundamentals," he said.
   
If advanced economies take their own action to ward off abrupt changes in exchange rates, "these actions should reduce the risk of excessive volatility in capital flows for emerging economies" that have floating rates.
   
Much of emerging Asia has been swamped by a tidal wave of capital seeking higher returns as the United States and Europe struggle for growth. Expectations of further US monetary policy easing have exacerbated the flows.
   
Geithner said the International Monetary Fund should take the lead in monitoring currency commitments made by the G20 powers, via a twice-yearly report.
   
The IMF itself should be reformed "to increase the voice and representation of dynamic emerging economies", the letter concluded.

Date created : 2010-10-22

  • USA

    Washington accuses China of blocking economic reform

    Read more

  • EUROZONE

    Geithner urges unity as EU nations forge ahead on reform

    Read more

  • G20

    Finance officials pledge to maintain stimulus measures

    Read more

COMMENT(S)