Emerging economies should consider steps to contain fund flows that could cause currency rallies and asset bubbles, the World Bank chief was quoted as saying, but the IMF called such actions “undesirable.”
The contrasting views over capital controls come amid rising tension between emerging and developed economies over exchange rates, which is expected to be a hot topic at G7 and IMF meeting starting today.
Western leaders are worried efforts by emerging economies to weaken their currencies could -derail the fragile economic recovery. Officials from developing markets say ultra-low interest rates in rich countries are fueling massive fund flows into their markets, pushing up their currencies and inflating prices of stocks, property and other assets.
World Bank president Robert Zoellick said emerging nations should consider various measures to control short-term capital flows, according to the Nikkei newspaper.
However, IMF deputy managing director Naoyuki Shinohara said it was natural and welcome for money to shift into economies with strong growth and policymakers should not try to curb such flows or use intervention to defend specific currency targets.
“When there are occasionally volatile moves in the market, intervention cannot be ruled out,” he told reporters in an interview in Washington on Wednesday. “But it’s totally undesirable for a country to intervene consistently to keep currencies at a certain level.”
Shinohara, who was Japan’s currency tsar before assuming the IMF post, warned that Tokyo faced a losing battle trying to go against the tide and weaken the yen as monetary conditions in the US and Europe are expected to remain easy.
“This is not something that Japan can control. If Japan tries to adjust this, it will distort markets,” Shinohara said, adding that Tokyo should instead focus on structural reforms and monetary easing to beat deflation.
Zoellick, however, was careful not to judge Japan and other nations that have stepped into markets to weaken their currencies.
“I’m neither endorsing them nor criticizing them,” Zoellick told the Nikkei in an interview published yesterday on its English Web site.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
United Microelectronics Corp (UMC, 聯電) forecast that its wafer shipments this quarter would grow up to 7 percent sequentially and the factory utilization rate would rise to 75 percent, indicating that customers did not alter their ordering behavior due to the US President Donald Trump’s capricious US tariff policies. However, the uncertainty about US tariffs has weighed on the chipmaker’s business visibility for the second half of this year, UMC chief financial officer Liu Chi-tung (劉啟東) said at an online earnings conference yesterday. “Although the escalating trade tensions and global tariff policies have increased uncertainty in the semiconductor industry, we have not
RSS