World financial leaders have tried to cool simmering currency tensions that threaten the slow economic recovery, with the United States calling on the International Monetary Fund to take a stronger hand in bringing about order.
US Treasury Secretary Timothy Geithner said the rebalancing of the global economy was not progressing as well as needed, and foreign exchange interventions in countries with undervalued currencies were hindering the effort.
'It is ultimately the responsibility of countries to act but the IMF must speak out effectively about challenges and marshal support for action,' he said.
Group of 20 finance ministers met in Washington over breakfast to thrash out the foreign exchange issues, which are in the forefront of this weekend's International Monetary Fund and World Bank twice-yearly meetings.
Canadian Finance Minister Jim Flaherty told reporters it was vital G20 countries not engage in protectionist measures in an effort to export their way to health, but he also singled out China, saying it must live up to a commitment to allow more currency flexibility.
He expressed hope officials in Washington over the weekend could find a way through the currency tensions that have raised fears of a global round of competitive devaluations.
The smaller group of rich G7 advanced economies was set to hold a closed-door dinner later on Friday at which currencies were also expected to be discussed.
China's policy of managing the value of its yuan has raised the hackles of trade partners who consider it unfairly undervalued and claim it permits China to rack up huge trade surpluses at others' expense.
The yuan ended at its highest closing level on Friday since a landmark revaluation in July 2005, possibly a sign Beijing is sensitive to the growing demands to let it rise more rapidly.
At the same time, expectations the US Federal Reserve will further ease monetary policy - boosted by a report showing the US economy lost 95,000 jobs last month - has pushed the dollar down to its lowest level in more than eight months against a broad basket of currencies.
The currency strains are symptomatic of a deeper problem: most advanced economies are not growing rapidly enough to reduce unemployment despite trillions of dollars in government stimulus spending and emergency loan guarantees.
For the US and much of Europe, options for providing more stimulus are limited because either politics, creditors or both prevent them from building up larger piles of government debt.
