Turmoil will impact exchange rates - IMF's Kato

The re-pricing of risk taking place as a result of the credit crunch will lead to a rebalancing of currencies and growth in the near future, according to Takatoshi Kato, the deputy managing director of the International Monetary Fund (IMF).

Kato said that the turmoil did present a risk that imbalances would be corrected in a disorderly manner because investors may shun dollar assets, which would create a problem in closing the US current-account deficit.

But he said that IMF had initiated talks

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