Lots of currency talk, no action yet
The International Monetary Fund (IMF) governors pose for a group photo during the annual IMF/World Bank meetings in Washington, D.C.
TEXT OF INTERVIEW
BILL RADKE: The dollar's down today against some major world currencies after global finance ministers tried and failed this weekend to hammer out an agreement on currency imbalances. Here to explain, reporter Janet Babin joining us live. Good morning, Janet.
JANET BABIN: Good morning, Bill.
RADKE: What's the issue with world currencies?
BABIN: So the problem is a push and pull between emerging and established nations. Countries like China and Brazil like to keep their currency values low -- that allows them to sell their goods to the U.S. at rock bottom prices. But it can also lead to instability, like today we see the dollar bouncing lower against other world currencies. The fear is that traders will dump the dollar on world currency exchanges. It follows that a lower dollar could lower the value of government bonds and that could make it more difficult to sell U.S. debt to foreign investors.
RADKE: Yeah, we do a lot of that. So what did the leaders come up with as a solution to the volatility?
BABIN: Well the International Monetary Fund held its annual meeting in Washington over the weekend. And just ahead of the meeting, IMF leader Dominique Strauss-Kahn, called for nations to work together on this problem.
DOMINIQUE STRAUSS-KAHN: There's no way for the global economy to be more stable to achieve growth everywhere if it's not done in a cooperative way. What I expect is that the progress of this idea will be strong enough to find a win-win situation in which everyone is better off rather than trying to find a domestic solution to a global problem, which as we know doesn't work.
But this global cooperation can be difficult to achieve. I mean outside of a crisis situation, like the financial collapse of a few years ago, nations usually work to protect their own interests first.
RADKE: Right. Just so. So where do we go from here?
BABIN: Well, leaders head to Seoul. There's a summit there next month and the finance ministers are expected again to talk again about some solutions to these global currency imbalances.
RADKE: Janet Babin reporting live. Thanks Janet.
BABIN: You're welcome, Bill.