Ideas to Action:

Independent research for global prosperity

Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

Currency Wars Are a Development Problem and the G-20 Has a Major Role to Play in the Solution

Last weekend’s communiqué from the G-20 finance ministers is a first step to bridge the divide in the ongoing currency wars. I find both hope and disappointment in the Communiqué. It is very positive that the G-20 ministers have called for the IMF to help identify countries with policies leading to large and unsustainable imbalances. This is a step in the right direction, although no specific quantitative indicators have yet been advanced.

G-20 And IMF Rhythms: The Problem Is Not the Direction but the Speed

If the commitments made last week by the heads of state at the G-20 meeting materialize quickly, this is good news indeed. The increase in available IMF and MDB resources for middle- and low-income countries, along with IMF’s announcement of a Flexible Credit Line which will allow countries to borrow amounts without pre-determined limits or conditionality, are crucial for helping these countries cope with the impact of the financial crisis.