WASHINGTON, Oct 12, 2010 (AFP)
There is “no risk” of a global currency war erupting, despite recent currency interventions by nations ranging from Japan to Colombia, US Treasury Secretary Timothy Geithner said Tuesday.
Geithner acknowledged in an interview on “The Charlie Rose Show” broadcast on Bloomberg TV that Brazil has made reference to the possibility, but he brushed aside fears.
“They used that phrase,” Geithner said. However “there is no risk of that.” Geithner’s comments came despite a failure this weekend by the world’s top finance officials meeting in Washington to reach a consensus on measures that could head off a potential currency battle.
In a statement, the International Monetary and Financial Committee — the policy arm of the IMF — on Saturday stopped short of any specific call on China or others to change policies of using a low currency and accumulation of reserves to boost exports.
The International Monetary Fund steering committee, which has been struggling to address friction among key economies including China and the United States, noted “tensions and vulnerabilities” due to “widening global imbalances” but said the organization should continue to study the situation
Geithner on Saturday said the IMF “must strengthen its surveillance of exchange rate policies and reserve accumulation practices,” adding that “excess reserve accumulation on a global scale is leading to serious distortions in the international monetary and financial system.”
Recent IMF figures showed Beijing had currency reserves of 2.447 trillion dollars, the largest in the world and nearly 30 percent of the global total.
Washington maintains that China purchases large amounts of dollars to keep the yuan artificially low, which distorts global trade by boosting Chinese exports.
Yuan forwards rose toward a two-year high after minutes from the Federal Reserve’s September meeting showed it was prepared to ease monetary policy further, boosting demand for emerging-market assets.
U.S. Treasury Secretary Timothy F. Geithner said China has let its currency rise in recent weeks at a “pretty significant rate” and will probably allow it to appreciate more over a longer period of time. He made the comments in an interview on the “Charlie Rose” show to air later today on the PBS network in the U.S. and tomorrow on Bloomberg Television.
“It’s a dollar story more than anything,” said Thio Chin Loo, a senior currency analyst at BNP Paribas SA in Singapore. “Even if it’s supposed to be more U.S. pressure, it won’t sway China from appreciating the yuan at its own pace.”
Twelve-month non-deliverable forwards climbed 0.1 percent to 6.4529 per dollar as of 10:47 a.m. in Hong Kong, reflecting bets the currency will strengthen 3.3 percent from the spot rate over the next year, according to data compiled by Bloomberg. The contracts touched 6.4320 yesterday, the highest since July 2008.
The yuan gained 0.1 percent in the spot market to 6.6676 today. Thio said the yuan may rise to 6.65 by year-end and 6.45 by the end of 2011.
China’s trade surplus narrowed to $16.88 billion in September, from $20.03 billion the previous month, the customs bureau said today. Exports increased 25.1 percent from a year earlier, compared with 34.4 percent growth in August. Imports climbed 24.1 percent.
The People’s Bank of China set today’s reference rate at 6.6693, the strongest level since a peg to the dollar was scrapped in July 2005.
Sumber : BLOOMBERG.COM