Multinational Currencies Strengthened &Nbsp; Triggered Currency War Fears.

The Australian dollar exchange rate rose to 7 Australian dollars to 1 Australian dollars to 98.71 cents, setting the highest level after the completion of the exchange rate control in 1983, including the yen, Brazil rial and won.

Dominique Strauss Kahn, President of the IM F, said in an exclusive interview with Le Monde on 7 Sunday that because of the lack of coordination among Monetary Policy in the world, he was worried that the currency war would happen.

Since August this year, the yen has been refreshing for 15 years, and the Australian dollar has risen 8.3% over the past month as the Fed expects to follow up the BoJ's expansion of the stimulus package. The won exchange rate has also continued to rise in recent months. It broke through 1 US dollars against the 1130 won mark on 4 days, the highest in 5 months, and the euro has risen 2.3% against the US dollar in the past week.

The rapid appreciation of the currency will seriously weaken the competitiveness of export enterprises and pose a serious threat to the export dependent economies such as Korea, Japan and Brazil.

In order to curb the soaring yen and the economic downturn, the Bank of Japan (nboc) launched a 5 day move to reduce the inter-bank unsecured overnight lending rate from the current 0.1% to zero to 0.1%. After 4 years, it implemented the zero interest rate policy again.

In August 30th, the Bank of Japan increased the size of the capital injection from 20 trillion yen to 30 trillion yen by publicly operating means, and began to intervene in the foreign exchange market to buy US dollars in September 15th. However, these measures failed to prevent the yen from maintaining a high level of 83 yen to 1 dollars.

South Korea and Brazil also released signals of possible action.

Yin Zengxuan, chief financial officer of South Korea's Planning Ministry, said on the 4 day that in view of the likely volatility of the foreign exchange market in recent years, the government is ready to take intervention measures when necessary.

Brazil's finance minister said last month 27 days that governments around the world are lowering their exchange rates to enhance their economic competitiveness. An international currency war has erupted.

In addition to the rising exchange rate affecting exports, emerging economies also worry that stronger exchange rates will accelerate the influx of hot money into emerging markets, further push up currency and asset prices, and increase the risk of the two financial crisis.

Standard Chartered Hongkong released 6 report that Asia will face a new round of capital inflow, and the risk of rising asset prices will increase.

The Bank economist said that up to about 300000000000 US dollars in 2007 had been inflows into the Asian region, and the trend of capital inflow is just beginning. There will be more market volatility and higher currency and asset prices in the future. This is what Asian central banks should be vigilant.

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Some analysts believe that the recent strengthening of multinational currencies is mainly due to the expectation that the United States will soon introduce quantitative easing monetary policy again, which will suppress the US dollar. If the United States implements further quantitative easing monetary policy, then the competitiveness of countries to adopt competitive devaluation measures will greatly increase.

If the unilateral intervention of the exchange rate emerge in an endless stream, other countries will also unwittingly lower their local currency, which will likely aggravate international disputes and trigger protectionism.

According to the analysis of the Wall Street journal, the intervention of foreign countries is still moderate.

If the "currency war" really happens, it is estimated that in 2011, the US Federal Reserve will decide to what extent it will further adopt quantitative easing policy.

If there are signs that the Fed's quantitative easing measures will be more moderate, the foreign exchange market is likely to remain stable.

At present, all countries are trying to release the signal to avoid the "currency war".

When Wen Jiabao met with the euro group "three carriages" on the 5 day, he pointed out that the EU should treat the RMB exchange rate objectively and fairly.

In his speech, Wen Jiabao pointed out that allowing the RMB exchange rate to float freely will make China pay a high price.

If some people demand that the RMB exchange rate rise by 20%-40%, China's export enterprises will fail a lot, and the society will be hard to stabilize.

Kahn said on the 7 day that Japan's recent intervention in the devaluation of the yen and Brazil's actions to deal with the revaluation of rial in Brazil are "potential threats", but IM F will make recommendations to avoid currency wars.

US Treasury Secretary Geithner also said on the 6 th that we should be vigilant against a series of foreign currency intervention measures that might be adopted by the countries concerned and the competing devaluation of currencies will drag the global economic recovery.

The exchange rate issue will become the most important topic at the IM F annual meeting and the G 7 finance ministers meeting, which began on the 8 day.

South Korean President Lee Myung-bak, in Seoul, said in Seoul on November that the Seoul summit of the group of twenty countries will be held in November to negotiate and cooperate on the exchange rate issue.

Lee Myung-bak said that the world economy is still unstable and needs cooperation from the international community.

During the period of economic recovery, trade protectionism must be avoided.