It is funny how some people view things . Just reading the reactions to the G20 communique from a number of leading Asia economists and their take on the headline – “those currencies faced with overvalued exchange rates due to capital inflows are fully justified in taking carefully designed macro prudential measures to combat the effects of this.” OK I understand where they are coming from – commodity currencies have gone through the roof – Brazil, South Africa or even Russia I can understand but NO they are talking about South Korea.
How on earth can country that runs a weak (beggar thy neighbour) exchange rate policy because its economy is solely export driven fall into this category. It is not only a weak currency stance but interest rates are kept artificially low. How many other G20 nations do we know where the FinMin (a politician) turns up to the central bank rate meetings and pressures everyone to keep rates unchanged. I am flabbergasted!
This is not a step forward.
