IMF vows to have say on currencies
27 Sep 2009
The IMF will not shy away from commenting on controversial currency issues in its new role supporting the G20 accord on a framework for balanced global growth agreed in Pittsburgh on Friday, its managing director has said.
His comments came as the World Bank president welcomed G20 endorsement of a plan to create a crisis-response loan facility for the poorest countries.
"If the IMF is not talking about currency, who will?" said Dominique Strauss-Kahn, IMF chief.
Asked whether this meant including currency issues in the IMF's reports back to the G20 on progress implementing the balanced growth agenda, he said: "Yes."
Any such commentary is likely to be controversial, with China in particular sensitive about external pressure on it to revalue the renminbi. The G20 was unable to agree any reference to currencies in its communiqué on Friday.
Mr Strauss-Kahn said the IMF could avoid singling out individual countries for blame. "It could be regional, it could be on a particular issue," he said.
His comments come ahead of the annual meetings of the IMF and the World Bank, which begins this weekend in Istanbul. The meetings are likely to see more tough negotiations over an overhaul of voting shares at both institutions.
The G20 communiqué included a commitment to a "shift in quota share to developing countries of at least 5 per cent from over-represented to under-represented countries".
There was no mention of an overhaul of IMF board seats that generated a pre-summit fight between the US, Britain and France. The IMF negotiations will run until January 2011.
The G20 gave a more unequivocal commitment to increase the vote share of developing nations by "at least 3 per cent" at the World Bank on top of a 1.5 per cent shift under way.
In an interview, Robert Zoellick, World Bank president said the mechanisms created by the G20 "create an opening" to address big global challenges. But he said "the peer review process has to be put into effect."
Mr Zoellick said it was essential that development and Africa formed a key part of the G20 agenda, with dynamic nations seeing the opportunity to foster growth in underdeveloped regions.
He was "very pleased" the G20 had backed plans to create a new kind of lending facility that would give the poorest nations rapid support when hit by shocks not of their own making.
Asked about the G20 claim that the new growth framework was a breakthrough in international economic cooperation, he said "It could be. It depends on the follow up by the parties."
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