What should be done about Asia’s undervalued currencies?
The US should not squander the rest of its influence by demanding foreign-exchange interventions
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[CAMBRIDGE] Major Asian currencies’ exchange rates are again at the centre of debates in international monetary economics.
With China, Japan and South Korea all running trade and current-account surpluses, and the US running corresponding deficits, some argue that the renminbi, yen and won are undervalued.
However, given the fundamentals underlying these imbalances, foreign-exchange intervention is unlikely to do much good.
