Asian countries, including China, have criticized the US Federal Reserve's decision to pump an additional 600 billion dollars into the market, saying this will push their currencies to new heights against the dollar.
The US Fed pumped another 600 billion dollars into the market on Wednesday
Economists and officials from Asia have reacted angrily to the US Federal Reserve's plan to print billions of dollars in an attempt to save its faltering economy.
“As long as the world exercises no restraint in issuing global currencies such as the dollar – and this is not easy – the occurrence of another crisis is inevitable,” Xia Bin, an advisor to the Central Bank of China warned.
He added that Beijing would pursue its own interests saying China "must think about what is good for us."
An adviser to China's central bank has warned Beijing will pursue its own interests
Controls over capital flows?
Meanwhile, the Ministry of Finance and Strategy in South Korea said it would “aggressively” consider introducing controls over capital flows.
In an attempt to cap gains, South Korea's central bank started selling the country's won currency after it hit six-month highs.
While Thailand raised the possibility of "concerted action" to combat the flood of investment dollars that are expected to wash into the emerging markets.
"The central bank governor has confirmed discussions with central banks of neighboring countries, which are ready to impose measures together if needed to curb possible speculative money flowing into the region," said Thai Finance Minister Korn Chatikavanij.
G20 finance ministers recently vowed to avoid a currency war
"A win for both blocs"
A senior Indian finance official, who spoke to Reuters on condition of anonymity, pointed out that while the United States had a right to stimulate its own economy, other countries would also pursue their own interests and any deal on currencies in Seoul, where the G20 kicks off next week, had to be a “win for both blocs”.
For its part, Japan warned it was ready again to use intervention to halt a rising yen which could hit its exporters.
The Bank of Japan is scheduled to unveil its rate decision on Friday in Tokyo.
Author: Miao Tian (Reuters, AFP)
Editor: Anne Thomas