Thursday May 17, 201202:57 PM GMT
Fed cash-injection raises global concern
A bank teller counts stacks of US dollars and Chinese yuan.
A bank teller counts stacks of US dollars and Chinese yuan.
Fri Nov 5, 2010 6:4PM
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Germany, China, Brazil and South Africa have criticized the US Federal Reserve for its plans to pump a total of USD 600 billion into the US economy.

The US central bank announced on Wednesday that it would spend USD 600 billion to buy government bonds, in the hope that the cash injection can kick start the country's economy.

German Finance Minister Wolfgang Schaeuble said the US policy was "clueless" and would create "extra problems for the world."

"The US Federal Reserve could weaken the US dollar and hurt exports to America," Schaeuble added.

China's Central Bank head Zhou Xiaochuan urged global currency reforms. Zhou did not elaborate on how the system should be changed.

"If the domestic policy is optimal policy for the United States alone, but at the same time it is not an optimal policy for the world, it may bring a lot of negative impact to the world," said Zhou.

On Thursday, Brazil's Finance Minister Guido Mantega warned that the Fed's move would hurt Brazil and other exporters.

South African Finance Minister Pravin Gordhan warned that "developing countries, including South Africa, would bear the brunt of the US decision to open its flood gates without due consideration of the consequences for other nations."

"The US policy undermines the spirit of multilateral cooperation that G20 leaders have fought so hard to maintain during the current crisis," he said.

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