Grim Mood At IMF, World Bank Meetings
SCOTT SIMON, Host:
NPR's Tom Gjelten reports.
TOM GJELTEN: Dominique Strauss-Kahn is managing director of the International Monetary Fund.
DOMINIQUE STRAUSS: Many are talking about a currency war, which may be a bit too military. (Unintelligible) say that many do consider their currency as a weapon.
GJELTEN: Carmen Reinhart is an international economics professor at the University of Maryland.
CARMEN REINHART: To the extent that Korea is intervening to avoid their currency from appreciating against the U.S. dollar and to the extent that they have similar exports to Brazilian exports, if Brazil doesn't do the same thing, they're going to become less competitive.
GJELTEN: This is what concerns Charles Dallara. He's the managing director of the Institute of International Finance, which represents the world's leading banks. Governments managed to get through the global financial crisis two years ago by working together, Dallara points out. If governments now start taking policies into their own hands, he says, it could derail the fragile economic recovery.
CHARLES DALLARA: We have to be alert to the risk that these kind of unilateral actions can really have an adverse impact on market confidence and on the sense that businessmen and consumers have around the world that we're all able to move together in the right direction.
GJELTEN: Kenneth Rogoff, a former chief economist at the IMF, says currency moves by governments are visible and take on symbolic importance even beyond their practical significance.
KENNETH ROGOFF: The big concern with this currency devaluation talk, with this currency war talk, is that it's very emotional and could lead to something else.
GJELTEN: Tom Gjelten, NPR News, Washington.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.