FACTBOX-Official comments on global currency tensions

Financial leaders from the Group of 20 major economies meet
in South Korea from Friday to try to take tackle global economic
imbalances and currency tensions that are feeding worries of
trade protectionism as the world economy struggles for a smooth
recovery from the financial crisis:

Investors are turning away from low-growth developed nations
to fast-growing emerging ones, prompting some countries to impose
measures to try to control the wave of capital from destablising
their economies. The following is a collection of official
comments highlighting the concerns and strains:
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MERVYN KING, GOVERNOR BANK OF ENGLAND:

— Speech, Oct 19: “The need to act in the collective
interest has yet to be recognised, and, unless it is, it will be
only a matter of time before one or more countries resort to
trade protectionism as the only domestic instrument to support a
necessary rebalancing.”

“That could, as it did in the 1930s, lead to a disastrous
collapse in activity around the world. Every country would suffer
ruinous consequences — including our own.” [ID:nSLAJLE6FX]

WORLD BANK:

— East Asia and Pacific Economic Update report, Oct. 19:
“Larger inflows combined with ample domestic liquidity and rising
confidence have boosted stock markets, real estate prices and
other asset valuations in some countries, precipitating fears of
a new bubble.”

“The authorities in East Asia need to take adequate
precautions to ensure that they do not repeat the same mistake
twice in slightly over a decade.” [ID:nTOE69I02D]

TIMOTHY GEITHNER, U.S. TREASURY SECRETARY:

— Comments to business leaders, Oct. 18: “It is very
important for people to understand that the United States of
America and no country around the world can devalue its way to
prosperity, to (be) competitive.”

“It is not a viable, feasible strategy and we will not engage
in it.” [ID:nN18291636]

JAPANESE FINANCE MINISTER YOSHIHIKO NODA:

— News conference, Oct 19 (referring to his Oct 14 comments
on South Korea and China): “There seems to be some
misunderstanding.” [ID:nTOE69I01X]

— To reporters about FX intervention, Oct 15: “I’ll make a
decision when necessary regardless of the G7 or G20.”
[ID:nTOE69E00B]

— To parliamentary panel, Oct 14: “As chair of the G20,
South Korea’s role will be seriously questioned.” “In South
Korea, intervention happens regularly, and in China, the pace of
yuan reform has been slow.”

“Our message is that we have confirmed at the Group of Seven
that emerging market countries with current account surpluses
should allow their currencies to be more flexible.”
[ID:nTOE69C00G]

GUIDO MANTEGA, BRAZIL FINANCE MINISTER

— On G20 meetings, Oct. 18: “This has to end in an
agreement. While there isn’t this co-ordination, we will not sit
around watching our currency strengthen.” [ID:nN18280200]

— Speech, Sept 27: “We’re in the midst of an international
currency war. This threatens us because it takes away our
competitiveness.” [ID:nN27256208]

SOUTH KOREAN FINANCE MINISTER YOON JEUNG-HYUN:

— Comments to trade officials, Oct. 15: “We, as the chair
country of the G20 summit, need to sternly deal with
protectionist moves.” [ID:nTOE69E00M]

CHINESE MINISTRY OF COMMERCE SPOKESMAN YAO JIAN:

— Press briefing ahead of expected release of U.S. currency
manipulator report, Oct 15: “It is entirely wrong for the U.S. to
make an issue of China’s trade surplus and hence put pressure on
the yuan exchange rate.

“Other countries have no right to comment on what is a
reasonable level for a country’s trade surplus.

“China, as a responsible country, will further press ahead
with yuan exchange rate reform and the reform will be pursued
according to domestic economic conditions.” [ID:nTOE69E031]

IMF MANAGING DIRECTOR DOMINIQUE STRAUSS-KAHN:

— Financial Times interview, Oct 5: “There is clearly the
idea beginning to circulate that currencies can be used as a
policy weapon.”

“Translated into action, such an idea would represent a very
serious risk to the global recovery… Any such approach would
have a negative and very damaging longer-run impact.”
[ID:nLDE6942A2]
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Compiled by Asia Economics and Markets Desk, Singapore
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FACTBOX-Official comments on global currency tensions