October 22, 2010 09:49
The success of the G20 Seoul Summit is in doubt due to an escalating global currency war, the Financial Times said Wednesday. The prognosis came in two articles headlined "Doubts Grow on Prospects for G20" and "India Warns on Damage from G20 Tension," which quote remarks by Indian Prime Minister Manmohan Singh and Mervyn King, the governor of the Bank of England.
The daily quoted one top Indian official as saying, "There's no agreement on diagnosis... We've lost consensus about how to tackle the situation. That's my worry about the Seoul conference. The G20 is in serious difficulties."
On Oct. 14, the paper quoted Japanese Finance Minister Yoshihiko Noda as saying that Korea would be called to account in its role as the chair of the G20 summit for frequently intervening in the exchange market to keep the won low, branding Korea a "currency manipulator."
Market players have intervened aggressively, including the Bank of Korea which buys U.S. dollars in the amount of US$1 billion daily, the FT reported.
Already on Oct. 12, the daily expressed pity for Korea since it seems "likely to preside over a rumble in Seoul's concrete jungle as the global currency fist fight rolls into town."
Some Koreans think the newspaper is being unfair. Right after the outbreak of the global financial crisis caused by the Lehman Brothers bankruptcy in the U.S. in 2008, the Financial Times warned Korea would "go under soon." But contrary to the dire predictions, Korea overcame the crisis faster than all other OECD countries. By contrast the U.K., where the paper is based, is still floundering.
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