U.S. to Ask Group of 7 to Shift its Policy on Exchange Rates

In this topic treasury secretary John W. Snow ask the Group 7 industrialized nations to change their policy and back to flexible currency exchange rates. It means market should determine the exchange rate. But this policy would be useful if every community expressed support for it. The United States also support his idea. Officials of Group 7 of Europe also said the organization might call on countries to let the market set foreign exchange rates. Analysts said that Mr. Johns sight were focused on China’s eight year-old currency peg to the dollar and Japan’s recent record sales of yen. The officials believe that by using market mechanisms they can strengthen the dialogue with other major economic areas to promote a smooth adjustment to international imbalances.

Group of 7’s Economic Officials Urge Re-opening of Trade Talks

Here we see that China and Japan falls under the criticism of Group of 7. The group of 7 agreed that market should be the determinant of exchange arte. They also said that exchange rate should reflect economic fundamentals. Officials of Group of 7 told that China is trying to protect its currency from the ups and downs of global economic swings and China is unlikely to change its policy. On the other hand Japan is trying to protect its currency by start buying yen to employ with the organization’s wishes. Group of 7 also criticized that Japan is doing the exact opposite what commitment they gave to Group of 7 directives in the past. I.M.F also criticized the Palestinian Authority. Karim Nashashibi the I.M.F  representative in the west Bank and Gaza, told in the News conference that , since 1999, Mr. Arafat has channeled about $900 million in public funds into a Bank account he controls. The funds were invested in nearly six dozen enterprises in the Palestinian territories and overseas. But Hanan Ashwari, A Palestinian legislator and onetime Arafat’s spokeswoman supported Arafat. She told that, there might be an incident of misuse of fund in the past but that the release of the information was an attempt to discredit the Palestinian leader. Finally we see that Finance ministers of different countries discuss greater global cooperation to counter terrorism and terrorist financing. And most of the countries are beginning to show a greater willingness to control terrorism.