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Global Financial Imbalances: The Future Impact of Asian and Middle East Surpluses

Global Financial Imbalances: The Future Impact of Asian and Middle East Surpluses. Karen Johnson April 24, 2006. Exchange Rates: Chinese RMB. Source: FRB weights. Exchange Rates: Korean Won. Source: FRB weights. Exchange Rates: Japanese Yen. Source: FRB weights.

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Global Financial Imbalances: The Future Impact of Asian and Middle East Surpluses

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  1. Global Financial Imbalances: The Future Impact of Asian and Middle East Surpluses Karen Johnson April 24, 2006

  2. Exchange Rates: Chinese RMB Source: FRB weights

  3. Exchange Rates: Korean Won Source: FRB weights

  4. Exchange Rates: Japanese Yen Source: FRB weights

  5. Current Account Balance (% of GDP) Source: IMF WEO

  6. Current Account Balance (% of GDP) Source: IMF WEO *Hong Kong, Korea, Singapore, Taiwan

  7. Global Oil Prices (WTI) Source: Commodity Research Bureau

  8. Revenue Flows to Fuel Exporters Source: IMF WEO

  9. Foreign Exchange Reserves Source: IMF *Indonesia, Malaysia, Philippines, Singapore, Thailand, Hong Kong

  10. Foreign Exchange Reserves: Aggregate of Fuel Exporters Source: IMF *No data available for Turkmenistan, Iran, Iraq, or Syria **2005 data not yet available for Angola, Rep. of Congo, Equatorial Guinea, Gabon, Sudan, Bahrain, UAE, or Yemen

  11. Portfolio Inflows to the United States Source: Treasury International Capital System (www.treas.gov/tic/index.html) *Indonesia, Malaysia, Philippines, Singapore, Thailand, Hong Kong **Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, UAE

  12. Inflation: Consumer Prices Source: IMF WEO

  13. Gross Issuance of Chinese Sterilization Bonds Source: Bloomberg

  14. Distortions • Implicit subsidy to exports • Distort allocation of domestic fixed investment • Continue to attract capital inflow

  15. Downside of Reserve Accumulation • Complications posed for monetary policy • Distortions on bank behavior • Limits on financial sector development • Price signals altered by the exchange rate

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