From Istanbul to Brasilia to Mumbai comes a crescendo of complaints about dollar imperialism. Heads of state and central bank governors allege that the policies of central banks in industrial countries, especially the U.S. Federal Reserve, pursued in self-interest, are wreaking havoc in emerging-market economies. This allegation is mostly unfair. Emerging markets aren’t hapless and undeserved victims; for the most part they are simply reaping what they sowed.
China’s renminbi may displace the dollar as the world’s main reserve currency within a decade, according to Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics, based in Washington D.C.
Australia’s dollar fell, extending its biggest weekly decline against the yen since November, after China raised the reserve ratio requirement for banks and as flooding sapped the South Pacific nation’s outlook for growth.
The Canadian dollar rose for a fourth week of gains against its U.S. counterpart, the longest stretch of advances since October, on a rise in commodities and speculation the U.S. recovery will spur growth in Canada.
French Finance Minister Christine Lagarde, vying for the leadership of the International Monetary Fund, pledged to be impartial toward European nations seeking aid and to give emerging economies greater influence.