The IMF said on Thursday that worries over currency wars are “overblown” and that it did not see major currency values as being particularly out of line.
“On the so-called talk of currency wars which we feel is overblown,” IMF spokesman Gerry Rice told reporters, “our multilateral assessment doesn’t indicate very significant deviation from fair value for the relevant currencies.”
Speaking ahead of the G20 ministers’ meeting in Moscow, where Japan’s efforts to force the yen lower will be a hot topic, Rice acknowledged that the issue of competitive devaluations, raised by many countries with strengthening currencies, should be monitored.
“These are obviously developments to watch with an eye on a cooperative approach, and of course the IMF will do its part in this effort,” Rice said.
The G20 meeting comes as eurozone leaders have voiced worries about the euro’s appreciation, and others have assailed Japan for pushing the yen sharply lower to boost its economy.
Earlier this week the US urged the world to refrain from “competitive devaluation,” a message echoed by the EU commission, France and Germany.
And the G7 group of the world’s richest nations — including Japan — issued a statement on Tuesday to calm markets by declaring a commitment to “market-determined exchange rates.”
However, some officials said the pressure will mount on Tokyo.
“Japan is not in the clear. Everyone understands that this message was addressed to Tokyo as it was not respecting the rules of the collective game,” said a European finance official who asked not to be named.