Currency wars rage at Davos as US and Brazil spar over value of dollar and Chinese inflation
"We are going to see the recovery of nationalism and protectionism, I think we're going to face some type of currency war," said Jose Sergio Gabrielli de Azevedo, president and CEO of Brazilian oil giant Petrobras.
"The US is going to try to use weak dollar policy to help recovery in the US, and Brazil, India are not going to accept that and will fight back, and then we're going to see some struggle and conflicts," he said.
Australian Foreign Minister Kevin Rudd, responding to a Chinese participant's defense of China's currency policies, said, "A few of the rest of us would say a better approach is the appreciation of the renminbi."
Beijing has been wary of letting go control of its currency even as food prices rises are driving up inflation — a situation that has been partly blamed for spurring anti-government protests in the Middle East this week.
Rudd said the world has huge concerns about how China will deal with its inflation, and urged Beijing to "get the exchange rate right."
Concerns about where the renminbi, dollar and in particular the euro are heading were aired as more than two dozen senior officials from key economies met in Davos to discuss sending a political signal that a new global trade deal can be completed this year.
Thailand's prime minister said that failure to conclude the so-called Doha round of trade talks, which have been nearly 10 years in the making, indicated a leadership vacuum on the global stage.
"Despite what global leaders say, they are still very much dictated by domestic politics," Abhisit Vejjajiva told a panel.