The head of the Bank of England warned on Monday that too many countries were trying to weaken their currencies to offset the impact of the slow global economy and the trend could grow next year.
"You can see, month by month, the addition to the number of countries who feel that active exchange rate management, always to push their exchange rate down, is growing," Mervyn King said in a speech.
The warnings by King, who is set to step down in July, echo those made in October by U.S. Federal Reserve Chairman Ben Bernanke, who delivered a blunt call for certain emerging economies to allow their currencies to rise.
The back and forth of monetary stimulus and foreign-exchange intervention has complicated any coordinated efforts to recover from the Great Recession.
"It is fair to say a recovery of a durable kind is proving elusive," King said in his speech.
Fielding questions later, he said he had "great confidence" that the United States will avoid the worst-case effects of the so-called fiscal cliff of automatic tax hikes and spending cuts due to come into force in January.
It "will find a way, if not avoiding going over the cliff, then hanging on by the finger tips" on the other side, he said.
"You can see, month by month, the addition to the number of countries who feel that active exchange rate management, always to push their exchange rate down, is growing," Mervyn King said in a speech.
The warnings by King, who is set to step down in July, echo those made in October by U.S. Federal Reserve Chairman Ben Bernanke, who delivered a blunt call for certain emerging economies to allow their currencies to rise.
The back and forth of monetary stimulus and foreign-exchange intervention has complicated any coordinated efforts to recover from the Great Recession.
"It is fair to say a recovery of a durable kind is proving elusive," King said in his speech.
Fielding questions later, he said he had "great confidence" that the United States will avoid the worst-case effects of the so-called fiscal cliff of automatic tax hikes and spending cuts due to come into force in January.
It "will find a way, if not avoiding going over the cliff, then hanging on by the finger tips" on the other side, he said.
http://www.reuters.com/article/2012/12/10/us-britain-boe-king-idUSBRE8B913720121210
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