Bush revives currency plan

PRESIDENT George Bush has relaunched an American proposal aimed at helping to calm currency volatility and improving co-ordination of economic policies among the leading industrial countries.

Concern over last week's currency turmoil prompted Mr Bush to relaunch a US plan in which movements in leading currencies would be measured against movements in prices of a basket of commodities, including gold. Mr Bush, who made the presentation to finance ministers of industrial and developing countries attending the International Monetary Fund annual meetings, said the basket could be used alongside other measures of economic performance, such as growth, inflation and trade imbalances, to strengthen economic policy coordination.

If the basket measure suggests that exchange rates have become misaligned, there could be changes in economic or monetary policies, perhaps backed up by intervention on the currency markets. In principle it would provide an 'objective' measure of exchange rate changes for meetings of the Group of Seven leading industrial states.

The US plan was first unveiled in 1987 when James Baker as Treasury Secretary tried unsuccessfully to establish a semi-fixed exchange rate system for leading currencies. The relaunch this week, to be repeated at the United Nations General Assembly, reflects Mr Baker's new role as White House Chief of Staff.

Some support for for Mr Bush's proposals began to emerge yesterday.

Michel Sapin, the French Finance Minister, and Michel Camdessus, managing director of the International Monetary Fund, both urged a new debate of the global monetary system. Henning Christophersen, Vice-President of the European Community Commission, said the Atlantic dialogue on currency reform should be reinvigorated.

The IMF was accordingly said to be considering bringing forward to early 1993 the date for its semi-annual meetings.

Though the US plan may fail to attract widespread international backing as was the case five years ago, worries about eroding co-operation among the Group of Seven may breathe life into the broader debate over reforms to the world monetary system.

Underlining concern over instability in financial markets, the IMF last week suggested that market liberalisation had not been matched by regulation and the policing of markets by governments.

Separately, Britain urged that debt relief terms for the world's poorest countries should be improved.

In a speech to the World Bank/IMF Development Committee, Robin Leigh-Pemberton said that the current relief offered by industrial countries - including a write-off of two-thirds of a country's debt - was insufficient, especially for those trying to reform their economies.

The Governor of the Bank of England, standing in for Norman Lamont who has returned to London, said: 'Relief needs to be more generous.'

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
Sport
football This was Kane’s night, even if he played just a small part of it
Travel
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
News
news
News
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
media
News
Threlfall says: 'I am a guardian of the reality keys. I think I drive directors nuts'
people
Voices
voices The group has just unveiled a billion dollar plan to help nurse the British countryside back to health
News
The Westgate, a gay pub in the centre of Gloucester which played host to drag queens, has closed
news
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss