Money Matters - Simplified

U.S. urges more currency accountability

Washington -- The world's industrialized nations should hold key countries, particularly China, accountable for their currency policies, a U.S. official says.

U.S. Treasury Secretary Timothy Geithner said in a speech at the International Monetary Fund Saturday that the fund needs to take a more advanced role to make sure countries don't use exchange rates to get advantages in trade, The Washington Post said Sunday.

China is accused of using its low currency rate to gain a trade surplus, the Post said.

"Excess reserve accumulation on a global scale is leading to serious distortions in the international monetary and financial system," Geithner said. He urged the fund, among other things, to "increase the candor" of its public statements about whether particular national policies are hurting the global economic recovery.
However, The New York Times reported Saturday the world's financial leaders failed to reach agreement on how to manage the escalating dispute on currency, despite urging by the United States.

The Times said the annual IMF meeting did not result in placing significant pressure on China to allow a meaningful rise in the value of its currency, the renminbi.

The report said the dispute was deferred until leaders of the Group of 20 economic powers, including U.S. President Barack Obama, gather in Seoul in November.

Copyright 2010 United Press International, Inc. (UPI).

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