In light of the relatively muted recoveries to date in the advanced economies, the central banks of those economies have generally continued accommodative monetary policies. Some observers, while acknowledging that an aborted recovery in the advanced economies would be highly detrimental to the emerging market economies, have nevertheless argued that these MONETARY POLICIES are generating negative... [more]
In light of the relatively muted recoveries to date in the advanced economies, the central banks of those economies have generally continued accommodative monetary policies. Some observers, while acknowledging that an aborted recovery in the advanced economies would be highly detrimental to the emerging market economies, have nevertheless argued that these MONETARY POLICIES are generating negative spillovers. In particular, concerns have centered on the strength of private CAPITAL INFLOWS to many emerging market economies, which, depending on their policy responses, could put UPWARD PRESSURE on their CURRENCIES, boost their INFLATION RATES, or lead to ASSET PRICE BUBBLES.
Third, policymakers in the emerging markets have a range of powerful--although admittedly imperfect--tools that they can use to manage their economies and prevent overheating, including EXCHANGE RATE ADJUSTMENTS, monetary and fiscal policies, and macroprudential measures
http://www.federalreserve.gov/newsevents/speech/bernanke20110218a.htm[less]
Response by Riversider
about 15 years ago
Posts: 13573
Member since: Apr 2009
The war of words over international currency valuations escalated yesterday when the Chinese premier Wen Jiabao told the European Union to stop pressuring Beijing to revalue the yuan as any rapid shift risked unleashing serious social unrest in China.
Speaking in Brussels, Wen said that China would move towards making its currency more flexible but he rejected calls for a rapid appreciation as the issue threatened to dominate this weekend's meeting of the International Monetary Fund and G7 countries in Washington.
"Do not work to pressurise us on the renminbi [yuan] rate," Wen said, departing from a prepared speech on the sidelines of a summit with EU leaders. "Yes, we are going to proceed with the reforms."
China has been criticised by the EU and even more so by the US for pegging its currency at a low level, meaning that its exports are cheaper worldwide, hindering the efforts of western nations to recover from recession via export-led growth.
But Wen said yesterday that China's trade surplus with the US was explained by the specific structures of the two economies, not the yuan exchange rate.
The war of words over international currency valuations escalated yesterday when the Chinese premier Wen Jiabao told the European Union to stop pressuring Beijing to revalue the yuan as any rapid shift risked unleashing serious social unrest in China.
Speaking in Brussels, Wen said that China would move towards making its currency more flexible but he rejected calls for a rapid appreciation as the issue threatened to dominate this weekend's meeting of the International Monetary Fund and G7 countries in Washington.
"Do not work to pressurise us on the renminbi [yuan] rate," Wen said, departing from a prepared speech on the sidelines of a summit with EU leaders. "Yes, we are going to proceed with the reforms."
China has been criticised by the EU and even more so by the US for pegging its currency at a low level, meaning that its exports are cheaper worldwide, hindering the efforts of western nations to recover from recession via export-led growth.
But Wen said yesterday that China's trade surplus with the US was explained by the specific structures of the two economies, not the yuan exchange rate.
http://www.guardian.co.uk/business/2010/oct/06/currency-war-warning-imf-chief