African states rebounding from the global downturn are far better placed than in the past to ensure currencies do not become overvalued and damage competitiveness, a top World Bank official said on Saturday. World Bank Managing Director Ngozi Okonjo-Iweala said, however, that rising capital inflows could become a concern as African countries attract more money from short-term investors seeking higher returns.
Global currency tensions are at the centre of discussions at meetings of the International Monetary Fund and World Bank in Washington this weekend. "The continent has implemented remarkably sensible policies. Fiscally, they've been responsible. Exchange rate management has been reasonable. People have learned the lessons of overvaluation in the past," Okonjo-Iweala told Reuters. "Part of the new resilience that they are showing is that they understand that flexibility with the exchange rate is part of the package."