Economic problems won't be solved by a currency 'fix'

Currencies were on the top of the agenda at last weekend's G7 meeting. But, says Stephen Roach, the US and Europe's gripes about the renminbi and the yen are a distraction from the real issues.

All eyes are on foreign exchange on the eve of another G-7 meeting of finance ministers and central bankers. Fixation on the Chinese currency remains intense from the American side, and the Europeans are increasingly concerned about the weakness of the Japanese yen. In my view, these concerns are misplaced. In a world where the main misalignments are on the saving-investment axis, currency solutions are not the remedy. This timeworn fixation on foreign exchange markets detracts from the heavy lifting of structural change that is required to meet the competitive challenges of globalisation head-on.

How the Chinese currency became politicised

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.