Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: R2O who wrote (11310)	7/22/2004 6:05:50 AM
From: Jack Colton	Respond to of 12617

Thursday July 22, 4:26 PM IMF sees no sign US struggling to fund c/a deficit SINGAPORE, July 22 (Reuters) - Policy makers around the world must do much more to reduce economic imbalances or the correction will occur through exchange rate changes, International Monetary Fund chief economist Raghuram Rajan said on Thursday. Speaking to reporters after a lecture to Singapore's financial community, Rajan listed the coordinated measures he said were needed: "On the U.S. side, more action on the fiscal deficit; in Europe and Japan, raising growth; and in Asia, increasing domestic demand, which implies to some extent more exchange rate flexibility." Rajan said he was hopeful that the United States would continue to attract sufficient foreign capital to fund its current account deficit -- the main global imbalance. "Thus far, the U.S. deficit has been funded without much problem, and I don't see anything in the data which tells me this will change abruptly," Rajan said. In the absence of coordinated global policy measures, he said pressure would grow for exchange rates to effect the adjustments. "That said, there is still a hope that foreign investment into the United States will still continue for a long enough period so that the needed adjustment can be done by various countries and so that the brunt doesn't have to necessarily fall on the exchange rate," Rajan said. Economic modelling by Lehman Brothers suggests that a 20-25 percent depreciation in the dollar's trade-weighted value might be needed to reduce the U.S. current account deficit by two percentage points. The deficit is five percent of gross domestic product and growing.