Asian Currencies Should Appreciate: Chief Economist

Dubai, Sept 18: | Updated: Sep 19 2003, 05:30am hrs
Asian currencies, notably Chinas, should be allowed to appreciate against the American dollar to smooth out imbalances in the global economy, the IMFs chief economist has said.

Chinas growing trade surplus is troublesome and a stronger yuan would help alleviate it, said IMF Kenneth Rogoff here on Thursday. Its a very serious problem overhanging the global economy, Rogoff told a news conference ahead of the Funds annual meetings with its sister organization, the World Bank. Its probably getting worse.

The yuan and other Asian currencies should strengt-hen against the US dollar, he said, adding the dollar would eventually fall and the global economy would weather that better if the impact was spread among different currencies. AP

Its bad enough that the global economy is flying on one engine, but its going to be a lot worse if it has to land on one wheel, Rogoff said.

Beijing has come under increasing pressure to make the value of the yuan more flexible and let it rise along with the nations booming export trade, but China has made no commitments and it remains highly sensitive to anything that smacks of outside interference.

The Chinese central bank has kept the yuan - known also as the renminbi, or peoples money - fixed at about 8.28 to the US dollar since 1994. It is allowed to fluctuate, but not by much.

AP