Why a new Plaza Accord to address Asian currency weakness is unlikely to succeed
By
The Economist
Summary
The article discusses the recent weakness of Asian currencies, particularly the Korean won and Japanese yen, against a strengthening US dollar driven by America's economic growth and demand for tech stocks. It notes that US Treasury Secretary Scott Bessent has complained about these Asian currency weaknesses. The piece argues that a new Plaza Accord-style agreement (like the 1985 deal to devalue the dollar) would not work today because the conditions and political will for such a coordinated intervention are fundamentally different from what they were in 1985.
Source
bskyWhy a new Plaza Accord to address Asian currency weakness is unlikely to succeedecon.stKey quotes
· 5 pulledThe Korean won dropped to its lowest level against the dollar in 17 years.
The Japanese yen dropped even further, reaching its weakest against the greenback in four decades.
America's speedy economic growth and insatiable global appetite for its tech stocks are raising demand for its currency.
The treasury secretary, Scott Bessent, has groused about the weakness of both Asian currencies this year.
The conditions and will for a deal are not what they were in 1985
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