UPDATE 1-IMF’s Lipsky says moderate world recovery underway

* Global recovery on in line with forecasts – Lipsky

* Specific currencies not discussed at all – official
(Updates with currencies)

By Yoo Choonsik and Rachel Armstrong

GWANGJU, South Korea, Sept 5 (BestGrowthStock) – The world economy
is recovering moderately but still faces challenges such as the
need for medium-term fiscal consolidation, the IMF’s First
Managing Director, John Lipsky, said on Sunday.

“They are mainly confident that there is a moderate
recovery underway globally,” he told reporters, referring to
delegates at the G20 meeting of deputy finance and central bank
chiefs in South Korea.

“Obviously there are risks and challenges, but things seem
to be moving more or less in line with our forecast,” he said,
listing well-designed exit strategies and medium-term fiscal
consolidation as challenges.

He said some good progress has been made in discusing
changes to the IMFs executive board, but did not elaborate. G20
members have pledged to reach an agreement on the issue by the
time leaders meet in Seoul in November.

The United States, frustrated at Europe’s refusal to share
more IMF power with emerging economies, took unprecedented
action last month to block plans that would have kept Europe’s
long-running dominance over the 24-member board.

Emerging economies have called for a bigger say in
international institutions such as the IMF in line with their
increasing contribution to the global economy and the resultant
importance in global economic policy coordination.

A senior Indonesian official told Reuters separately that
emerging economies want more voting powers as well as a
readjustment in the way the global economic policy is made.

“For emerging markets, the important thing is not only the
size of the increase of the quota, but the general idea of the
relationship between the quota and governance of the IMF — and
that needs to come in one package,” Hartadi Sarwono, deputy
governor of the Indonesian central bank, said in an interview.

One senior official from a member country, who attended the
whole of the meetings, told Reuters there was no discussion
about specific currencies or currency issues, although issues
related to reducing the global imbalances were a key topic.

“Delegates did not talk about any specific currencies or
about a specific level of a currency, but of course they
discussed global rebalancing,” said the official, who did not
want to be identified.

Japan is grappling with the yen’s (JPY=: ) soaring to 15-year
highs against the dollar and policymakers have repeatedly said
they could take decisive action on the yen — normally a code
phrase for currency intervention. [ID:nTOE68300K]

South Korea will host the Nov. 11-12 summit of G20 leaders
in Seoul, with key issues also including reforming the global
financial regulatory framework and drawing up plans to put the
world economy on a balanced and sustainable growth path.
(Editing by David Fox)
([email protected]; +82 2 3704 5580; Reuters
Messaging: [email protected])
(If you have a query or comment on this story, send an email
to [email protected])

UPDATE 1-IMF’s Lipsky says moderate world recovery underway