'Major IMF Reforms' to Be Announced at G20 Summit

      September 30, 2010 11:51

      Dominique Strauss-Kahn

      The International Monetary Fund expects major changes within the fund to be announced at the G20 Summit in Seoul next month. "I won't say that we're close to an agreement, but we're not very far," IMF Managing Director Dominique Strauss-Kahn said, and a deal could be reached by November.

      The comments came amid mounting tensions between the U.S. and Europe countries over the need for major changes to the IMF.

      In a press conference Tuesday at IMF headquarters in Washington D.C., Strauss-Kahn told reporters that some European countries should relinquish their board seats at the fund to make way for emerging economies. "Giving seats to countries such as Turkey or South Korea -- whose G20 economies surpass those of the Netherlands or Belgium, both of which have IMF board members -- would likely have to come at some European nations' expense," he added.

      Conflict is growing between the U.S. and Europe over changes at the fund ahead of the IMF's annual general meeting in Washington on Oct. 8-10.

      Meanwhile, Strauss-Kahn said there is little chance of a "currency war" with individual countries devaluing their currencies against the U.S. dollar triggered by Japanese intervention in the foreign exchange market earlier this month for the first time in six years. "Currency intervention is unlikely to be successful. Too small an intervention doesn't have any effect... and too large a move can trigger retaliation by trading partners. It's clearly not a global solution," he said.

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