FEDERAL Reserve chairman Ben Bernanke accused China’s currency interventions of harming the global recovery last night, just hours after Chinese authorities hit out at the US for stoking the currency war.
An angry China warned Washington that passage of a bill aimed at forcing Beijing to let its currency rise could lead to a trade war between the world’s top two economies.
China’s central bank and the ministries of commerce and foreign affairs accused Washington of “politicising” currency issues and putting the global economy at risk after US senators voted on Monday to start a week of debate on the bill.
Yet Bernanke fanned the flames with his comments. “I do think that China’s currency policy ... has been to some extent preventing global adjustment,” he said. “A more balanced growth path could be achieved if there was greater flexibility in currencies.”