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APEC ministers urge flexible FX to ease imbalances
(Agencies)
Updated: 2009-11-11 21:12 SINGAPORE: Asia-Pacific finance ministers were set to call for flexible exchange rates among measures to try to reduce global economic imbalances that were at the heart of the financial crisis.
"We agreed that flexible prices, including exchange rates and interest rates, play a critical role in allocating resources efficiently, and can facilitate the adjustments needed to support balanced and sustainable global growth," the latest draft statement by the finance ministers said.
Press liaison officers said Chinese representatives were present when the finance ministers' draft was discussed. The APEC draft statement coincided with a monetary policy statement by China's central bank, the People's Bank of China, that provided the country's clearest signal yet that it would allow the currency to appreciate again. It said it will consider major currencies in guiding the yuan. US Treasury Secretary Timothy Geithner said on Wednesday he believes strongly in the need to maintain a strong dollar and said America was determined to get its budget deficit down. "I believe deeply that it's very important to the United States, to the economic health of the United States, that we maintain a strong dollar," Geithner said in a meeting with Japanese reporters at the US embassy on Tokyo. The US Treasury chief was visiting Japan before heading later on Wednesday to Singapore to join the meeting of APEC finance ministers on Thursday. Deeply imbalanced Foreign, trade and finance ministers from APEC are in Singapore for meetings that will culminate in a weekend summit that Obama and other leaders will attend. After foreign and trade ministers met for breakfast on Wednesday, Singapore's representative George Yeo said they had discussed the global economic recovery, reform of financial institutions and resisting protectionism. He said the consensus among ministers was that the global economic crisis was "by no means over." "The upturn that we now have is a respite. The situation is still fragile. We should still address the root cause of the problem," he said. The draft finance ministers' statement agreed member economies with big deficits would undertake policies to support savings and those with surpluses would take steps to boost domestic demand to address the imbalances. The finance ministers are expected according to the draft statement to pledge to maintain economic stimulus plans to support a global economic recovery. World Bank President Robert Zoellick said he was comfortable about the world's growth prospects this year, but said there were risks. "Recovery globally is not going to be symmetrical. It's going to be at a different pace," he told reporters in Singapore. The trade and foreign ministers also have other issues on their agenda -- including ways to mitigate the impact of climate change by promoting energy efficiency. They will look at various models for a possible Asia-Pacific free trade area, which leaders of the group could then discuss at their weekend summit in Singapore. APEC member economies account for 40 percent of the world's population across four continents, more than half of global gross domestic product and nearly half of world trade. But their members range from relatively poor countries such as Papua New Guinea, Peru and the Philippines, emerging markets such as Indonesia, Thailand and Malaysia, and rich economies, including the United States and Japan. |
