Last week, I had the pleasure of moderating a governors? seminar on global payments imbalances at the annual meeting of the Asian Development Bank in Hyderabad. The discussion made even clearer than before how far the irresistible force of US desire for exchange-rate movement ? well expressed by US Treasury undersecretary Timothy Adams ? meets the immoveable object of Asian resistance. As a result, I fear, the chances of a row even worse than the one accompanying the end of the Bretton Woods exchange-rate system in the early 1970s grow ever bigger.

In Hyderabad, Yong Li, China?s vice-minister of finance, referred to ?rumours that the US dollar might depreciate by 25 per cent? as shocking. Similarly, Sadakazu Tanigaki, the Japanese finance minister, warned the ADB seminar that ?overemphasising realignments of exchange rates could invite market speculation and deal a blow to the global financial markets?.