French minister-IMF should press U.S. on forex

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PARIS, Oct 20 (Reuters) The International Monetary Fund should ask the United States to fix imbalances that are keeping the dollar weak against other currencies, French secretary of state for Europe Jean-Pierre Jouyet said on Saturday.

Asked whether the IMF should ask the United States to be more understanding with trade partners concerning foreign exchange imbalances, Jouyet told France Info radio that the Fund should press for action.

''I think they should ask the United States to correct their imbalances. That seems quite legitimate to me,'' he said just ahead of a meeting of the IMF in Washington.

The comments reflect longstanding French concerns that Europe is being penalised by the weakness in other currencies such as the dollar, the Japanese yen and the Chinese yuan.

Speaking shortly after the Group of Seven industrialised nations urged China to let its currency rise faster to rebalance global growth, Jouyet said the main foreign exchange issue for Europe was not the strong euro but weakness in other currencies.

''The real problem is that there are other currencies which are undervalued -- a certain number of administered currencies, notably the Chinese currency, which is truly undervalued in comparison with the performance of the Chinese economy.'' Jouyet said the undervalued Chinese currency had long been the subject of international concern but that the IMF should also address the U.S. currency imbalance.

''You have an economy which has truly overheated, which is the Chinese economy with an administered currency, the yuan.

And the weakness of the yuan has been targeted by Europe and the United States for a long time,'' he said.

''You have the United States and American imbalances which have been targeted by the G7 and which, in my opinion should be targeted by the International Monetary Fund, which meets today in Washington,'' he said.

''It would be normal that these imbalances, which are also the source of international monetary tensions, should also be targeted by the International Monetary Fund.'' REUTERS SBA VC1425

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