WASHINGTON — The head of the International Monetary Fund on Friday urged global finance ministers to stop trying to manipulate their currencies for economic advantage and instead to join to save a fragile recovery.
The global economy is struggling to emerge from the worst recession since the end of World War II, said IMF managing director Dominique Strauss-Kahn. Unless the pace of job growth quickens, he said, “we really face the risk of a lost generation” of young people unable to get work.
Strauss-Kahn’s remarks came as finance ministers from around the world gathered for the annual meetings of the 187-nation IMF and its sister lending organization, the World Bank.
“We are gathering at a pivotal moment facing a very uncertain future,” Strauss-Kahn told the delegates. “Growth is coming back but we all know that it is fragile and uneven.”
Strauss-Kahn said he saw a particular threat to the recovery from a breakdown in cooperation among nations, emphasized by growing talk of currency wars.
In recent days, the Obama administration has increased pressure on China to allow its currency to rise in value against the dollar as a way to boost U.S. exports. Other nations, including Japan, Brazil and South Korea, also have taken steps to keep their currencies weaker in an effort to increase exports.
In his comments, Treasury Secretary Timothy Geithner increased pressure on China to revalue its currency, saying that progress in combatting the global recession was being put at risk by China’s resistance to a faster appreciation of the yuan.
“Our initial achievements are at risk of being undermined” by countries that are relying on exports for growth instead of building up their domestic demand, Geithner said. He also called on the IMF to play a greater role in monitoring economic actions in its member countries.
But Chinese officials continued to insist that their efforts to revalue their currency gradually was the best approach.
