APEC ministers urge flexible FX to ease imbalances

By Neil Chatterjee

SINGAPORE (Reuters) - Asia-Pacific finance ministers were set to call for flexible exchange rates among measures to try to reduce global economic imbalances that were at the heart of the financial crisis.

The 21-member Pacific Rim group includes China, which is under pressure, particularly from the United States, to allow its currency to rise, having effectively pegged it against the dollar since the middle of 2008 to help fend off the global downturn.

"We agreed that flexible prices, including exchange rates and interest rates, play a critical role in allocating resources efficiently, and can facilitate the adjustments needed to support balanced and sustainable global growth," the latest draft statement by the finance ministers said.

Foreign, trade and finance ministers from the Asia-Pacific Economic Cooperation forum (APEC) have gathered in Singapore ahead of a summit of their national leaders this weekend focused on avoiding future crises, whether financial or climatic.

APEC is dominated by members of the Group of 20, including the United States, Russia, Japan and China, which has supplanted the Group of Seven as the world's premier forum for global policy making.

Press liaison officers said Chinese representatives were present when the finance ministers' draft was discussed.

The APEC draft statement coincided with a monetary policy statement by China's central bank, the People's Bank of China, that provided the country's clearest signal yet that it would allow the currency to appreciate again.

It said it will consider major currencies in guiding the yuan.