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IMF to 'closely' examine currency swings

Wednesday, April 15, 2015 - 07:06
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Top finance officials from the world's leading economies are keeping a close eye on exchange rate swings and will discuss developments in China's currency at talks in Washington this week, a German government source said.

[BERLIN] Top finance officials from the world's leading economies are keeping a close eye on exchange rate swings and will discuss developments in China's currency at talks in Washington this week, a German government source said.

Currency changes are being "closely watched" by central bankers and treasurers ahead of the spring meeting of the International Monetary Fund (IMF) and World Bank, the source told reporters.

"We'll get a discussion on the US dollar/renminbi," the source added, referring to the Chinese currency, ahead of the talks starting Friday.

The US Treasury said last week that the Chinese and South Korean governments should stop intervening in markets to protect their undervalued currencies and let them rise.

In a semi-annual report to Congress, the Treasury said Beijing had reduced its foreign exchange market intervention on behalf of the yuan, also known as the renminbi (RMB), consistent with promises to Washington.

Even so, the Treasury said the yuan remains "significantly undervalued", which helps the country maintain its massive trade surplus with the United States.

The euro has also markedly depreciated against the dollar since the start of the year, largely due to the European Central Bank's sovereign bond purchase programme launched last month.

"But there are no accusations" coming from the US about the euro's value, the source said.

Several of the eurozone's partners, including the IMF, had openly called for the QE, or "quantitative easing" sovereign bond purchase scheme, which faces criticism in Germany.

AFP

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