International Monetary Fund chief defends Beijing from currency manipulation claims

Finance Minister Asad Umar speaks in a video message. — DawnNewsTV

Pakistan's currency plunged by almost 7 percent after the government said it would seek emergency bailout loans from the International Monetary Fund (IMF).

The World Bank last week cut SA's GDP growth estimate for 2018 to 1% this year from 1.4%, while the SA Reserve Bank slashed its forecast to 0.7% from 1.2% in September.

Last month, the Swiss government, raised its GDP forecast for 2018 to 2.9% from 2.4% and, earlier this year, it was announced that Swiss exports had matched and surpassed their recent growth.

"Notwithstanding the present demand momentum, we have downgraded our 2019 USA growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation".

The IMF expects the United States economy to continue growing this year at 2.9%, but sees that rate falling to 2.5% next year amid the country's escalating trade war with China.

This week, the finance minister will lead a Pakistani delegation at the annual meeting of the International Monetary Fund (IMF) and World Bank in Bali, Indonesia.

As part of its new Global Financial Stability Report, the International Monetary Fund said on Wednesday that financial institutions to "step up their preparations for a post-Brexit landscape" and prepare for the worst case scenario - a no-deal Brexit, also known as a hard Brexit.

To cool inflationary pressure, the American central bank, the Federal Reserve, is raising interest rates, which acts as a further attraction to global capital because returns are higher.

"Iran and Russian Federation, both faced with U.S. sanctions, have devised plans to increase trade interaction and ease mercantile regulations", Iran's state-run Tasnim News Agency added.

The IMF had recently termed the exchange rate as "overvalued".

The financial outlook, combined with global uncertainty over trade tensions between Washington and trading partners like China, has created "a bit of an unprecedented situation" for the world economy, said Lagarde.

The downgrade reflects a confluence of factors, including the introduction of import tariffs between the U.S. and China, weaker performances by euro zone countries, Japan and Britain.

The minister said that Pakistan will have to take tough decisions to fix the economy.

"Where we are now is we've gotten some bad news".

Global economic expansion remains strong, but the trade war could potentially shock investor confidence, with "significant adverse consequences" for global macroeconomic activity, Tobias Adrian, IMF monetary and capital markets department director, told reporters. The 0.2 percentage point downgrade to the 2019 growth forecast is attributable to the negative effect of recent tariff actions, assumed to be partially offset by policy stimulus, it said.

In September, the USA implemented another round of tariffs on $200 billion worth of Chinese goods, which were met with countermeasures out of Beijing on $60 billion worth of US goods.

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