China: US QE policy destabilized currencies

China said US quantitative easing, a method of stimulating the economy by having the central bank buy up assets, is destabilizing currencies in emerging markets, Bloomberg reported. Quantitative easing resulted in currency volatility with “lingering negative impact on developing, emerging economies in particular,” said Zhu Hong, China’s deputy representative to the WTO, in a meeting on Monday in Geneva. The US Federal Reserve launched plans in September for a third series of easing, in which it will buy US$40 billion of mortgage-secured loans each month, in a bid to reduce the cost of borrowing to stimulate growth. Zhu made the statement at a meeting of the WTO, adding that the IMF and not the WTO was the proper setting for talks on exchange rates.