IMF hits out at China, India
The International Monetary Fund's managing director is urging China to ease exchange-rate controls to ease global financial imbalances and China’s own economic challenges, AP reported Friday.
“Dominique Strauss-Kahn said slower U.S. economic growth should affect China but the IMF still expects the Chinese economy to expand about 10 percent this year,” the report said. “Strauss-Kahn met in Beijing with Premier Wen Jiabao and China’s central bank governor.
' 'What I am working at is trying to explain to Chinese authorities ' that it’s in their own interests to have more flexible exchange rates,' he said. Beijing’s trading partners complain that the Chinese currency, the yuan, is kept undervalued, giving an unfair price advantage to Chinese exporters and adding to the country’s swollen trade surplus,' AP reported.
Interestingly, last week the IMF urged India to avoid hording foreign currency in a bid to curb the country’s ever-strengthening currency.
“Large capital inflows are exacerbating tensions in the monetary policy framework among exchange rate management, monetary independence, and financial openness,” the IMF said in an annual review of India released Feb. 3.
The rupee gained 12.3 percent against the dollar in 2007, hurting Indian exports.