Global Fi­nance Of­fi­cials Call for Firmer Poli­cies

IMF Ad­dresses Sta­bil­ity, Cur­rency

The Washington Post Sunday - - National News - By Harry Dun­phy

Global fi­nance of­fi­cials agreed yes­ter­day that the In­ter­na­tional Mone­tary Fund needs to strengthen and mod­ern­ize its poli­cies on mon­i­tor­ing ex­change rates to en­sure their ef­fec­tive­ness as glob­al­iza­tion deep­ens.

Gor­don Brown, Bri­tain’s fi­nance min­is­ter and the head of the IMF’s pol­icy-steer­ing com­mit­tee, said the qual­ity and the can­dor of the sur­veil­lance process need to im­prove to pre­serve global eco­nomic sta­bil­ity.

He said the re­vi­sion should be car­ried out in a way that adds “no new obli­ga­tions” to IMF mem­ber coun­tries and takes “an even­handed approach based on di­a­logue and per­sua­sion.”

Brown said, “I can as­sure you that the re­form agenda at the IMF is mov­ing for­ward.”

He spoke in Wash­ing­ton at the end of a day-long ses­sion that was part of the spring meet­ings of the IMF and its sis­ter in­sti­tu­tion, the World Bank.

The head of the IMF, Ro­drigo de Rato, drew at­ten­tion to the sec­tion of the group’s com­mu­nique that calls for China to grad­u­ally im­prove its ex­change rate mech­a­nism.

“Ex­change rate flex­i­bil­ity will grad­u­ally in­crease, with at­ten­tion paid to the value of a bas­ket of cur­ren­cies,” de Rato said. “Ef­forts will be made to cul­ti­vate the for­eign ex­change mar­ket and deepen re­form of for­eign ex­change ad­min­is­tra­tion.”

While seek­ing new ways to pres­sure Bei­jing, U.S. Trea­sury Sec­re­tary Henry M. Paul­son Jr. also ad­vo­cated “bold ac­tion” to change the IMF. The or­ga­ni­za­tion founded 62 years ago to fos­ter eco­nomic sta­bil­ity “no longer looks like the eco­nomic world in which we live,” he said.

“Let us be clear: Ex­er­cis­ing firm sur­veil­lance over mem­bers’ ex­change rate poli­cies is a core func­tion of the in­sti­tu­tion,” Paul­son said.

Fi­nance min­is­ters from Latin Amer­ica and Europe en­dorsed Paul­son’s po­si­tion on cur­rency sur­veil­lance.

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