derrick 9th edition

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 Currency war will take longer to sort out : experts With currency row spilling over to countries other than US and China, experts feel that the vexed issue needs to be tackled on a gradual process as each country has its own interests to protect. In the backdrop of emerging economies seeing huge capital inflows, the strategies to address currency-related issues would differ from country to country, they said. The vexed issue of currency devaluation has been at the forefont of international fora, with US mounting pressure on China to let yuan appreciate. America has alleged that lower peg of the Chinese currency has resulted in high trade surplus in favour of the communist country. G-20 countries, at their recent summit in South Korea, had pledged to act against competitive devaluation of currencies to ensure balanced global economic growth. US Federal Reserve chief Ben Bernanke said that international monetary system was not working as well as expected due to "currency devaluation by surplus countries". These comments were seen as a veiled reference to China. The issue of competitive currency devaluation assumes importance, since it is no longer confined to just US and China. Even Japan and South Korea were reported to have interfered in the Forex markets to stem the appreciation of Yen and Won respectively. Commenting on the currency controversies, Crisil's chief economist DK Joshi said that countries have their own interests. "China is resorting to devaluation because of its huge labour force and hence employment to them, US has its own interests, some middle ground has to be found," he said. On other hand, loose monetary policies and stimulus efforts in advanced nations has led huge foreign capital inflows into emerging economies, posing the risk of their currencies appreciating. "If there is deluge of capital inflows and it results in appreciation of local currency too rapidly, some kind of intervention is necessary...," Joshi said. INSIDE THIS ISSUE: CORPORATE watch INDUSTRY watch ECONOMY watch FACT OF WEEK INTERVIEW ZARGONOMICS JOB watch ENTREPRENEUR ANSWERS OF SYNAPZ QUIZ-2 WITH QUESTION UPCOMING EVENTS

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