IMF Work Program Focuses on Restoring Stability, Growth, and Jobs

On May 29, 2012, the Executive Board of the International Monetary Fund (IMF) considered the IMF's bi-annual work program through November 2012. Recent developments point to the continued fragility of the world economy and the risks of renewed stresses with potentially systemic consequences. In this context, the work program focuses on issues to help restore global economic stability and confidence and to rekindle growth and job creation.

“The commitment to increase Fund resources by over 0 billion on a temporary basis attests to the membership’s willingness to act collectively and decisively to get ahead of the crisis,” IMF Managing Director Christine Lagarde said in presenting the work program to the Executive Board. “For our part, we must continue to support these efforts with clear and pointed advice on macro financial policies, and strong and well-designed programs. This is true not only for Europe, where the risks to stability have been acute, but across the span of the membership,” Ms. Lagarde emphasized.

An important challenge, in this context, is to enhance inclusive growth, while ensuring debt sustainability. The Fund will provide analysis and policy advice on achieving credible fiscal consolidation and government debt reduction, an issue germane to many members, while supporting growth. Analytical work is also underway on issues related to jobs and growth in Fund surveillance and programs.

“We need to continue to offer pragmatic remedies to the main risks confronting the global economy, help members address spillovers, and support their economic transitions and development agendas. We need also to strengthen our internal processes, with reforms of surveillance, quotas and governance,” Ms. Lagarde concluded.

The work program, published today, prioritizes efforts in these areas, including:

• Restoring stability and strengthening policy advice, including on the continued repair and reform of the financial sector, and on various aspects of growth and employment;
• Assessing the experience with Fund conditionality and drawing lessons for new programs;
• Stepping up support for Arab countries in transition;
• Assisting low-income countries with policy advice and financial support, including issues such as rebuilding buffers while meeting development needs, managing natural resource wealth, assessing experience to date with the comprehensive reform of facilities, and securing the longer-term sustainability of concessional financing;
• Promoting the long-term stability of the international monetary system, including improvements in the Fund’s surveillance framework, to help prevent future crises; and
Implementing the 2010 quota and governance reform that will enhance the legitimacy and effectiveness of the Fund.

Source | International Monetary Fund - Blog NEWS | http://imf-news.blogspot.com/2012/06/imf-work-program-focuses-on-restoring.html

Yen Advances as Slower U.S. Growth

The yen rose against most of its major counterparts after the U.S. economy grew less than forecast and Standard & Poor’s cut Spain’s credit rating, adding to concern Europe’s debt crisis is worsening.

The yen also gained amid concern new Bank of Japan stimulus won’t be enough to boost the nation’s growth. Higher-yielding currencies including New Zealand’s dollar and Mexico’s peso climbed versus the U.S. dollar after slower growth in first- quarter gross domestic product revived bets the Federal Reserve won’t be quick to abandon efforts to support the economy.

The BOJ decision “was fairly disappointing, so the temptation to sell the yen was weakened,” said Sebastien Galy, a senior foreign-exchange strategist at Societe Generale SA in New York. “Slightly disappointing data in the U.S., as long as it’s not too disappointing, is risk-supportive because you have hope for quantitative easing.”

The yen strengthened 0.7 percent to 80.45 per dollar at 12:39 p.m. in New York, extending its weekly rally to 1.3 percent. It reached 80.42, the strongest level since April 17. The Japanese currency advanced 0.4 percent to 106.60 per euro and touched 106.16, the strongest since April 18. The euro rose 0.2 percent to .3250, gaining 0.2 percent this week.

Source | Forex News Paper | http://forexnewspaper.blogspot.com/2012/04/yen-advances-as-slower-us-growth.html

Yen Gains to Six-Week High Versus Euro on Growth Outlook

The yen climbed to the strongest level in almost six weeks against the euro and gained versus all its most-traded counterparts as signs global growth is slowing underpinned demand for the relative safety of the currency.

The dollar rose versus all its major peers except the yen after South Korea unexpectedly lowered interest rates, while the euro slid below .22 for the first time since July 2010. The Bank of Japan (8301) refrained from expanding stimulus, adding to haven demand. China releases quarterly gross domestic product data today. Australia’s dollar slid after employers cut jobs.

“The Bank of Japan monetary-policy decision didn’t lead to any significant new expansion in the BOJ balance sheet or something the market would consider more aggressive quantitative easing,” Shahab Jalinoos, a Stamford, Connecticut-based senior currency strategist at UBS AG, said in a telephone interview. “The market was disappointed, and the yen clawed back some recent losses.”

The yen gained 0.9 percent to 96.72 per euro at 1:15 p.m. New York time after appreciating earlier to 96.43, the strongest level since June 1. Japan’s currency advanced 0.6 percent to 79.30 per dollar. The euro weakened 0.4 percent to .2196 after sliding to as low as .2167.

Japan’s currency rose versus the dollar as the extra yield investors receive for investing in two-year U.S. Treasuries versus comparable Japanese government bonds fell to the lowest in a month, limiting dollar-denominated assets’ appeal. The yield spread was 16 basis points, or 0.16 percentage point.

Source | Forex News Paper | http://forexnewspaper.blogspot.com/2012/07/yen-gains-to-six-week-high-versus-euro.html