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Last Updated: Tuesday, 19 June 2007, 10:26 GMT 11:26 UK
IMF steps up exchange rate rules
Rodrigo de Rato
Mr de Rato: The IMF must 'promote countries' external stability'
The International Monetary Fund(IMF) is introducing a new surveillance system for foreign exchange policies that may cause instability in the world economy.

The IMF has updated its existing 30-year-old monitoring scheme, to target currency manipulation that could destabilise trade and capital flows.

IMF boss Rodrigo de Rato said the new rules would show "what is acceptable to the international community".

The IMF refused to say it was aimed at China, criticised for its yuan rate.

Some US lawmakers claim China is keeping its yuan currency undervalued to gain an unfair competitive edge for its exports.

The US trade gap with China moved to $232.5bn (117bn) in 2006.

But the IMF said its new forthcoming legal framework for monitoring a country's currency exchange programme did not target any specific country.

It said the framework would provide a level playing field for all its 185 members by being clearer and broader in scope.

"It reaffirms that surveillance should be focused on our core mandate, namely promoting countries' external stability," said Mr de Rato, the IMF's managing director.

The new principles that will make up the framework of fresh rules will be announced on Thursday.

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