In an interview with the BBC Strauss-Kahn said currency disputes showed countries were not co-operating as well as they had during the financial crisis. He also warned there were signs some countries were using their currency “as a weapon.”
“The willingness of the countries to work together, which was very strong at the climax of the [financial] crisis is not as strong today,” he said.
“’Currency war’ might be too strong, but the fact the countries want to find domestic solutions to a global problem is really a threat to the recovery.”
China has long been accused of keeping its currency artificially low, with the US and Europe leading accusations it is doing so to support its own exporters and in turn damaging the exporters of other countries. Strauss-Khan acknowledged this and said the IMF has been “saying for years” the yaun is undervalued.
“[China] will go in this direction – the question is the speed. Certainly they can go faster than they are today,” said Strauss-Khan.
“On the other hand we shouldn’t believe that all the imbalances in the economy today will be solved if the value of yuan was changed.”
Meanwhile, on Thursday Washington reiterated that China needed to take steps relating to its currency.
“We are watching and evaluating the measures and the steps that they take. We continue to believe that China must take steps,” White House spokesman Robert Gibbs said.
