Economic stability key to global peace —IMF

*Naira loses N53 kobo

By Babajide Komolafe
The International Monetary Fund (IMF) has said that  economic stability  is critical to achieving global peace. Meanwhile, the nation’s currency, Naira, lost another 53 kobo, Monday, at the foreign exchange auction conducted by the Central Bank of Nigeria. (CBN).

naira sygns

At the end of the auction, the exchange rate rose to N149.14 per dollar from N148.6. The Naira has been depreciating against the dollar at the official market since October 16th. During period it lost 264 kobo as the exchange rate rose from N146.51 to N149.14.

In a speech delivered at Oslo, Sweden last week, Managing Director IMF, Dominique Strauss-Kahn, urged  policy-makers to focus on economic stability to help underpin world peace.

IMF chief said, “The global economic recovery is no accident, but rather the result of bold and coordinated policy action taken by leaders around the world.

“It was not just good luck. It came from the bold decisions taken by policymakers the world over, and-just as importantly-from an un-precedented degree of economic policy cooperation. In the face of crisis, countries came together to face common challenges with common solutions, focusing on the global common good. We saw this in fiscal policy, in monetary policy, and in financial sector policy” .

Strauss-Kahn stressed that the crisis is by no means over, and many risks remain. “Economic activity is still dependent on policy support, and a premature withdrawal of this support could kill the recovery. And even as growth recovers, it will take some time for jobs to follow suit. This economic instability will continue to threaten social stability,” he added.

The IMF has said that recovery is expected to be slow, as financial systems remain impaired and support from public policies will gradually have to be withdrawn. Households in economies that suffered asset price busts will continue to rebuild savings while struggling with high unemployment, according to the October World Economic Outlook (WEO), released on October 1.

The challenge for the post-crisis world was to sustain the spirit of cooperation, he added. “In an atmosphere of great fear and uncertainty, cooperation was not so hard to achieve. But with optimism on the rise, and recovery on the horizon, countries may be tempted to go their own way, and to abandon the cooperative approach that served them so well during the crisis.”

But he said recent decisions by the Group of Twenty (G-20) industrialized and emerging market countries gave a strong signal that multilateralism is here to stay.

Preserving international cooperation would be important in maintaining a peaceful world. Both peace and economic stability were intimately intertwined, he said.

“Ultimately, peace and prosperity feed on each other. I believe history teaches us this lesson. We all remember how the Great Depression created fertile

ground for a devastating war. More recently, in many parts of the world, economic instability provoked political upheaval, social unrest, and conflict.The IMF had played its part in the multilateral response to the current crisis, promoting the global public good of economic stability. “When the crisis hit, we were sent out as a first responder, and G-20 leaders boosted our resources substantially.

And as the crisis unfolded, we scaled up our emergency financing dramatically, we injected an unprecedented amount of liquidity into the system, we made our lending more flexible, and we supported the international response to the crisis with our forecasts and policy advice.”

“We tried to play our part in calming the waters. And having earlier expressed confidence in us by increasing our resources, G-20 leaders meeting in Pittsburgh extended this confidence to our surveillance, asking us to help with their mutual assessment of policies. Our goal is now to adapt to the needs of the post-crisis world,” Strauss-Kahn added.