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IMF chief economist: Dollar rise has no economic basis

29 October 2008 10:36 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. The rapid appreciation of the US dollar against major world currencies has no economic basis and is temporary, said Ria Novosti quoted Kenneth Rogoff, the Harvard Professor and former IMF Chief Economist, as saying.
"Dollar rallying on the deteriorating U.S. economy is an incredible phenomenon. It can be explained only by the fact that investors are more scared what is happening in Europe that happenings in the U.S.", he added.
Unlike most analysts who predict the dollar to recover as a key reserve currency and exchange rate gap between the dollar and the euro to decline, Rogoff stands against this optimism.
"I expect a boomerang effect - a return to a point that existed before the crisis,â€ he said.
According to him, the rising dollar reduces the competitiveness of American goods in foreign markets.