US pursuing dollar weakening policy: Greenspan

Thursday, 11 November 2010 22:48 - - {{hitsCtrl.values.hits}}

London (Reuters): The United States is pursuing a policy of weakening its currency, driving up exchange rates in the rest of the world, former Federal Reserve Chairman Alan Greenspan warned on Wednesday.

Former Federal Reserve Board Chairman Alan Greenspan

In a guest column for the Financial Times, Greenspan also said that as China holds down the renminbi, the upward pressure on other currencies risks a return to widespread protectionism.

“America is also pursuing a policy of currency weakening. The suppression of the renminbi and the recent weakening of the dollar are, of necessity, producing firming exchange rates in the rest of the world,” Greenspan wrote ahead of the Group of 20 summit in Seoul on Thursday. “Something has to give in this arena of zero-consolidated current account balances.”

The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent “currency wars” and a rush to protectionism that could imperil global recovery.

Greenspan said while the global trading system can tolerate a modest amount of protection, “the flaws in the global trading system are large and worrisome.”

“If the G20 is serious in pledging to sustain open multilateral trade and the international financial system that fosters it, it should be willing to forgo an element of sovereignty to achieve net gains for all,” Greenspan wrote.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.