IMF meets central bank chiefs
The International Monetary Fund was meeting central bank officials in China Monday to discuss ways to strengthen the global economic recovery, amid mounting fears of a damaging all-out currency war.
The People’s Bank of China hosted the conference in the country’s financial hub Shanghai, bringing together central bank chiefs and other officials from Asia, Africa, Europe, and North and South America, the IMF said.
The Shanghai conference follows IMF and World Bank annual meetings earlier this month, where finance officials discussed how to strengthen the recovery from the worst recession since World War II and the global financial system.
It also comes ahead of this week’s key Group of 20 meeting in South Korea, where currency reform is expected to dominate talks, amid fears that nations could adopt trade barriers to counter the rising prices of Asian exports.
“The conference is part of the ongoing international examination of the policy challenges posed by the global financial crisis,” the Washington-based IMF said in a statement.
PBOC chief Zhou Xiaochuan and IMF managing director Dominique Strauss-Kahn will co-chair the meeting, the institution said.
The US Federal Reserve was expected to be represented by Kevin Warsh, a member of the central bank’s policy-setting Federal Open Market Committee.
Monday’s meetings had been planned for several months and Il-Houng Lee, the IMF’s resident representative in China, said all discussions would be carried out behind closed doors.
The talks were focused on macro-prudential policies — the big systemic picture of reducing the risk of too-big-to-fail institutions, Chinese central bank policy adviser Xia Bin told reporters outside the meeting room.
A news conference has been scheduled for 6:00 pm (1000 GMT).
In the run-up to the G20 finance ministers’ meeting, which begins Friday in preparation for a Seoul summit next month, South Korea has warned that frictions over the currency upheaval are growing and could lead to trade protectionism.
The United States, facing mid-term elections next month, has ratcheted up the pressure on China to allow the yuan to rise more rapidly, but Beijing insists its currency must not be used as a “scapegoat” for US economic woes.
With Beijing keeping a tight grip on the yuan, many other Asian economies are suffering as their currencies soar against the dollar. Despite Europe’s debt woes, the euro has also surged.
In its statement, the 187-nation IMF added the meeting followed an IMF-sponsored gathering in South Korea of Asian policymakers and leaders in July, at which it “committed to forging a new relationship with the region.”
A year ago, the Group of 20 developed and developing nations tasked the IMF with stepping up its focus on global systemic stability.
Authorities agreed a broader approach was needed to spot weakness in the increasingly interconnected financial system, to complement the traditional micro-prudential regulations of bank-by-bank audit and supervision.
Asia-Pacific leaders will meet for a summit in Japan following the G20 gathering in Seoul next month.
Source: AFP