IMF Strauss-Kahn: Fed Took Prompt Measures To Address Crisis

Mar.17, 2008 in Market Outlook

Last Update: 3/17/2008 8:34:24 AM

PARIS (Dow Jones)–The Federal Reserve-orchestrated rescue of Bear Sterns Cos.
(BSC) and the emergency U.S. rate cut go in the right direction and will help
avoid systemic disruptions in financial markets, International Monetary Fund
Managing Director Dominique Strauss-Kahn said Monday.

“What the Fed did goes in the right direction, and it’s a signal that will help
restore confidence in markets,” he said.

Strauss-Kahn was speaking at a conference on structural reforms in Europe,
organized by the Organization for Economic Cooperation and Development.

Strauss-Kahn also said although recent developments on currency markets have made
the euro look overvalued, there is no need for central banks to intervene in
foreign-exchange markets to prop up the dollar at this point.

“The dollar has moved in line with its fundamentals for a long time, which means
its fall was predictable. Now the situation is tenser, but central banks still
don’t need to intervene at this stage,” the head of the IMF said.

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