{"id":19726,"date":"2011-02-14T08:12:54","date_gmt":"2011-02-14T08:12:54","guid":{"rendered":"https:\/\/armbanks.am\/2011\/02\/14\/232300\/"},"modified":"2024-12-15T12:49:57","modified_gmt":"2024-12-15T12:49:57","slug":"global-imbalances-back-imf-managing-director-warns","status":"publish","type":"post","link":"https:\/\/armbanks.am\/en\/2011\/02\/14\/19726\/","title":{"rendered":"Global imbalances back, IMF Managing Director warns"},"content":{"rendered":"<p><strong>YEREVAN, February 14, \/ARKA\/.<\/strong> \u201cGlobal imbalances are back, with issues that worried us before the crisis\u2014large and volatile capital flows, exchange rate pressures, rapidly growing excess reserves,\u201d IMF Managing Director Dominique Strauss-Kahn said at a panel discussion at the IMF in Washington,  D.C.<\/p>\n<p>He cited volatile capital flows, pressures on currencies and growing reserves as issues of concern. One way to improve the international monetary system would be the increased use of the IMF&#8217;s currency, the special drawing rights, to create a new reserve asset class.<\/p>\n<p>Strauss-Kahn said, &#8220;the recovery underway today is not the recovery we wanted. Unemployment remains at record highs, with widening income inequality adding to social strains.<\/p>\n<p>&#8220;In my opinion, reforms to the international monetary system that help us get to the root of these imbalances could both bolster the recovery and strengthen the system&#8217;s ability to prevent future crises.&#8221;<\/p>\n<p>Countries are building high levels of reserve to protect against a sudden reversal of capital flows, which reflects a lack of confidence in the capacity of the &#8220;global financial safety net,&#8221; Strauss-Kahn said. SDRs could be a factor in dealing with this issue, since they could be used as precautionary reserves, and &#8220;Using the SDR to price global trade and denominate financial assets would provide a buffer from exchange rate volatility,&#8221; he said. In addition, &#8220;Issuing SDR-denominated bonds could create a potentially new class of reserve assets,&#8221; although he noted &#8220;I expect the global reserve asset system to evolve only gradually, and along with changes in the global economy.&#8221;<\/p>\n<p>The IMF released a paper Thursday examining how increased use of SDRs &#8220;could contributed to a more stable international financial system,&#8221; he said.<\/p>\n<p>However, in a discussion with fellow panelists following the discussions, Strauss-Kahn said the idea of the increased use of the SDR would not be geared to replacing any one currency as a reserve currency, but simply aimed at strengthening the international system. Coping with capital flows and exchange rate volatility is another challenge that can &#8220;complicate macroeconomic management and threaten financial stability, especially in countries whose financial sectors lack depth,&#8221; Strauss-Kahn said. Since individual country actions &#8220;can have a significant impact on others,&#8221; he said the IMF is studying whether it would help to create &#8220;globally agreed &#8216;rules of the road&#8217; for managing capital flows.&#8221; -0-<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Global imbalances back, IMF Managing Director Dominique Strauss-Kahn warns.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","tstyn_error":""},"categories":[12139,12159,9216],"tags":[12182,12791,15917,12823],"class_list":{"0":"post-19726","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-economy-en","7":"category-exchange-market","8":"category-news","9":"tag-crisis","10":"tag-currency-market","11":"tag-imf-2","12":"tag-strauss-kahn"},"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts\/19726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/comments?post=19726"}],"version-history":[{"count":0,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts\/19726\/revisions"}],"wp:attachment":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/media?parent=19726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/categories?post=19726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/tags?post=19726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}