World on Brink of ‘Currency War’ After Japan Move: Russia
The world’s leading economies are on the brink of a “currency war” to keep up with Japan and use devaluation to boost their competitiveness, Russia’s central bank said.
“Japan is weakening the yen and other countries may follow,” Bank Rossii First Deputy Chairman Alexei Ulyukayev said at a conference in Moscow today.
The yen touched its lowest level in two years this week against the dollar on bets the Bank of Japan will raise its 1 percent inflation target and introduce more monetary stimulus at its Jan. 21-22 meeting. The euro remained lower following a drop yesterday after Luxembourg Prime Minister Jean-Claude Juncker, who leads the group of euro-area finance ministers, said the currency shared by 17 nations is “dangerously high.”
Reciprocal devaluations would hurt the global economy, Ulyukayev said today. Russia’s central bank, which manages the world’s fourth-largest stockpile of international reserves, didn’t buy or sell dollars or euros in December for the first month since at least August 2008, when the regulator started publishing the data.
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http://www.businessweek.com/news/2013-01-16/world-on-brink-of-currency-war-after-japan-move-russia
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