News / Asia

Fed Easing Prompts Further Currency Concern, Skepticism in Asia

Paul Volcker, chairman of President Obama's economic recovery advisory board, at Lotte Hotel, Seoul, 05 Nov
Paul Volcker, chairman of President Obama's economic recovery advisory board, at Lotte Hotel, Seoul, 05 Nov

Less than a week before South Korea hosts the Group of 20 economic summit, Asian governments are preparing to counter a new effort by the U.S. Federal Reserve to boost the American economy. One of President Barack Obama's top economic advisers is not certain how much the Fed's move will help.

Financial officials in Beijing, Seoul and other countries are reacting harshly to the U.S. Federal Reserve's plan to pour more dollars into the economy.

Asian countries worry the Fed's move will send a wave of cheap dollars to the region, driving up the value of their currencies, and dangerously inflating property and stock prices.

And, some economists in the region say, it may not do much to help the stagnant U.S. economy.

In a speech and remarks to reporters in Seoul Friday, even the chairman of President Obama's economic recovery advisory board, Paul Volcker, was less than optimistic about the Fed's move.

"The object of the exercise is obviously to provide some support for the American economy. I don't think that will be very large. That doesn't say there won't be any. And there are certainly hopes there will be some. But I don't think that action alone will make a very dramatic difference," said Volcker.

The former Fed chairman was speaking less than a week before the South Korean capital hosts political leaders at the Group of 20 summit. The meeting is supposed to find common ground to power a global economic recovery and reduce international financial and trade imbalances.

But there are growing signs the 20 leading economies may not achieve that goal. Thai officials are raising the possibility of Asia policy makers uniting to combat an expected flood of dollars as investors look to the region for better returns as a result of the U.S. move.

China, the number two economy behind the United States, on Friday expressed concerns about the Fed's move.

Vice Foreign Minister Cui Tiankai spoke at a briefing in Beijing on the G20 summit.

He says Washington owes other countries an explanation of the Fed's move, and that he has seen considerable concern about its effect on other countries. Cui goes on to say that as the main issuer of a reserve currency, the United States needs to take a responsible position.

Cui also rejected an idea, apparently supported by Washington and Seoul, for the G20 leaders to set specific targets for trade deficits.

The currency issue threatens to overshadow other agenda items at the G20 meeting, much to the consternation of host South Korea. But that has not prevented the Finance Ministry here from warning the Fed's action could force Seoul to take steps to limit incoming dollars, such as taxing foreigners who invest in South Korean treasury bills.

The Bank of Japan on Friday decided to keep at virtually zero a key interest rate. The Japanese central bank hopes this will foster a long-sought recovery for the world's third largest economy.  

You May Like

Reports of Mass Murder on Mediterranean Smuggler’s Boat

Boat sailed from Libya with 750 migrants aboard and arrived in Italy with 569 More

Video New Thailand Hotline Targets Misbehaving Monks

Officials say move aims to restore country’s image of Buddhism, tarnished by recent high profile scandals such as opulent lifestyle, drug and alcohol abuse, as well as child sex abuse More

Study: Dust from Sahara Helped Form Bahama Islands

What does the Sahara have in common with a Caribbean island? Quite a lot, researchers say More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Astronauts Train in Underwater Labi
X
George Putic
July 25, 2014 7:25 PM
In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid