Central Bank chiefs from rich countries were expected to harangue their poorer counterparts at the latest meeting of the Bank for International Settlements in Bangkok, Thailand, taking place yesterday and today.
In September, leaders of the Group of Seven leading economies meeting in Dubai called for more flexibility in exchange rates, in a statement seen as a criticism of Asia's intervention. And last week Jean-Claude Trichet, the new president of the European Central Bank and chairman of the Group of 10 central bankers, said the G7 call was aimed at Asia.
He said: "The recent message which was sent from Dubai was clearly - without quoting any particular currency - that we thought some Asian currencies could progressively and swiftly and orderly appreciate over time vis-à-vis both the dollar and the euro."
The Bank for International Settlements is made up of the Group of 10, which consists of the G7 countries - the US, Japan, Germany, Britain, France, Italy and Canada - plus Belgium, Sweden Switzerland and Sweden, making 11 in all.
They say the weakness of Asian currencies is encouraging their exports at the expense of those from developed countries. The problem is likely to be eased by an expected round of increases in interest rates by the Asian economies, making their currencies more attractive.
"What we'll see is a bunch of small economies raising rates," said Stephen Roach, Morgan Stanley's chief economist in Singapore. "The US will possibly be the last central bank to raise rates."
Central bank heads from China, India, the Philippines and Singapore are attending the G10 meeting to discuss the prospects for global economic recovery.Reuse content