WASHINGTON: The United States urged the International Monetary Fund to assess exchange rates and government’s interventions in the exchange market, pointing to China’s controls on the yuan.
Lew said in a statement to the IMF’s steering board, the International Monetary and Financial Committee, that world growth is still being held back by insufficient expansion of domestic demand in countries that run strong trade and capital surpluses.
“It is not enough for domestic demand growth to rise in surplus countries. Rather, domestic demand growth must exceed GDP growth,” he said. Lew said one issue involved in boosting domestic consumption in surplus countries — the leading one of which is China — is moving toward market-set exchange rates.
He said a “top priority” of the IMF should be to assess progress by members of the G20 group of leading economies toward their commitments to market-determined exchange rates. That priority “should include assessments of exchange rates and intervention,” he said.
“We encourage all IMF members to be transparent with respect to foreign exchange intervention and reserves composition.”
China specifically, he said, needs “further efforts” to shift to higher growth in domestic consumption and less dependence on export-led growth.
AFP
