IMF Currency systems depend on nations' needs

Ulhas Joglekar ulhasj at
Mon Jan 15 18:49:24 MST 2001

14 January 2001

IMF: Currency systems depend on nations' needs
KOBE, Japan: In a departure from its usual abhorrence of currency controls,
the International Monetary Fund acknowledged Saturday that interventions and
controls may be good for some nations.
The remarks by IMF Managing Director Horst Koehler were delivered at a
meeting of European and Asian finance ministers in the western Japanese port
city of Kobe.
"My conclusion is that the IMF needs to support its member countries in
making choices that best suit their needs," he said.
The IMF has been criticized as enforcing an overly Western approach to
currency and economic systems, often hurting the developing nations it is
trying to help in its bailouts.
The gradual softening of the approach by the international lender reflects
the lessons drawn from the 1997-98 Asian financial crisis, said Kunio Saito,
director of the IMF's Asian office.
"There is no perfect currency system, and there is none that's totally bad,"
Saito said.
Koehler told the Kobe gathering it was still unclear whether Malaysia, which
opted for controls on capital outflows during the financial crisis, made the
right choice.
But interventions can be good for even basically floating currencies like
the dollar, euro and the yen, he said. Currency pegs, like the one in Hong
Kong to the U.S. dollar, can work, Koehler said.
Exchanging views on currencies was a major part of the two-day gathering in
Kobe, ending Sunday.
China pushed for some controls amid flexibility, while nations like Great
Britain spoke out more strongly for a floating currency system, a Japanese
official who took part in the meeting said on condition of anonymity.
Japan was especially pleased by Koehler's remarks because the IMF was coming
closer to a view Tokyo had all along, he said. (AP)
For reprint rights:Times Syndication Service

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