Thursday, June 9, 2011

IMF chief's selection on merit: Lipsky

BEIJING: Acting IMF managing director John Lipsky said he was confident that selection of the fund's next chief would be based on merit, as French finance minister Christine Lagarde made her case in China.

The goal of the selection process is "to be open -- open means open to everyone -- transparent, and merit-based. We are confident that that will be the result of this process," Lipsky told a news conference on Thursday.

Lipsky, in Beijing for the International Monetary Fund's annual policy talks on the Chinese economy, also said it was "a complete coincidence" that his visit was at the same time as Lagarde, a frontrunner to lead the global lender.

Lagarde, in the Chinese capital to drum up support for her IMF bid, said on Thursday that she felt "very positive" about her talks in Beijing, and backed China's right to fill a top job at the Washington-based fund.

Lipsky said he was "highly confident that our membership will choose a leader who is talented, experienced, energetic and effective".

On China's economy, Lipsky said the country continued to be a "bright spot" for global growth and the IMF maintained its forecast for the world's second-largest economy to grow around 9.5 percent this year and next.

He also expects inflation, which has been hovering above five percent, to ease to around four percent by the end of 2011.

But Lipsky warned China faced financial risks from a massive credit binge in recent years, increased off-balance sheet lending -- apparently referring to a surge in local government debt -- and soaring property prices.

A rebalancing of China's export-dependent economy was critical for the stability and growth of the world economy, and a stronger and more flexible yuan was "absolutely part of that", he said.

Lipsky added that the yuan needed to become more freely convertible and more widely used for it to be included in the basket of currencies that determine the value of the IMF's Special Drawing Rights, an international reserve asset.

"It is certainly agreed that over time, the yuan is likely to become a candidate for inclusion in the SDR basket," he said.

toi

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