Members of the International Monetary Fund (IMF) on Saturday pledged joint efforts to reduce global imbalances, but mentioned nothing about their past pledge to resist all forms of protectionism—which has been growing among advanced economies.
embers of the International Monetary Fund (IMF) on Saturday pledged joint efforts to reduce global imbalances, but did not repeat their past pledge to resist all forms of protectionism—which has been growing among many advanced and emerging economies.
The International Monetary and Financial Committee (IMFC), the steering body of the fund, however, repeated its past stance on currency exchange rates. China has been accused in the past — especially by the US — of devaluing the yuan.
“We will refrain from competitive devaluations and will not target our exchange rates for competitive purposes. We will also work together to reduce excessive global imbalances by pursuing appropriate policies. We are working to strengthen the contribution of trade to our economies,” the IMFC said in a statement on Saturday.
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Finance Minister Sri Mulyani Indrawati's hopes to see protectionism specifically addressed — expressed in Jakarta before she headed to Washington — had been dashed, as the word ‘protectionism’ was not even mentioned once in the 1,886-word communique, which concluded the IMF’s 35th Spring Meetings.
During the press conference in Washington on Saturday, Bank of Mexico governor Agustin Carstens, who heads the IMF’s steering committee, said protectionism was a “relative term” and “ambiguous” as, according to him, there is no country that does not have any provisions on trade.
The IMFC statement also said that while the global economic recovery was gaining momentum, growth was “still modest”, and it warned of heightened political and policy uncertainties.
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