W.Bank chief says world needs to focus on fundamentals
World Bank President Robert Zoellick said on Wednesday it was important for policy-makers to look beyond exchange rates and focus on economic fundamentals.
Zoellick, attending an infrastructure conference organised by the World Bank and Singapore government, said China was more likely to allow its yuan currency to appreciate, a key demand of the United States, if there could be an agreement on economic fundamentals.
He said also he was not advocating a return to the gold standard.
Zoellick earlier this week surprised financial markets by suggesting the world's largest nations consider gold as an indicator to help set foreign exchange rates, amid concerns governments and central banks may try to kickstart their economies by devaluing their currencies.
The former U.S. trade representative, who served in several Republican administrations including Treasury, had said the new system "is likely to need to involve the dollar, the euro, the yen, the pound and (a Chinese yuan) that moves towards internationalisation and then an open capital account".
The United States has frequently criticised China, saying it deliberately undervalues its currency to boost exports. China says that the United States, via the Fed, is engaged in the same practice.
[Source: Reuters, Singapore, 09Nov10]
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