Monday, September 29, 2008

Chinese banker predicts weakened US dollar in long term

www.chinaview.cn
2008-09-28 17:55:31
Special Report: Summer Davos

TIANJIN, Sept. 28 (Xinhua) -- The U.S. dollar would face short-term fluctuations and weaken in the long run, a leading Chinese banker predicted here on Sunday.

Speaking at the Summer Davos forum in this north China port city, Bank of China Vice President Zhu Min said he believed it would be less likely for the United States to sell more treasury bonds to other countries to obtain the funds needed to bail out the turmoil-beleagued financial market, which would only accelerate inflation in other countries.

Instead, the U.S. could only issue other bonds to finance the rescue plan, which Zhu said would definitely cause the dollar depreciation in the long term. The bailout fund will have topped one trillion U.S. dollars if the U.S. Congress passes the Fed's 700 billion dollar financial rescue plan.

Zhu said market confidence could not be recovered simply with the help of the 700 billion dollars, citing the U.S. dollar is a currency with turbulent fluctuations.

"It takes a long time to solve the current liquidity strains and investment crisis," Zhu said.

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