A fight is looming between rich and poor countries over the value of the dollar and other key currencies, as governments use monetary tricks to boost their national recovery at the expense of other nations, political and business leaders warned Saturday.
Washington has been leaning hard on Beijing to allow the Chinese renminbi to rise, saying it is being kept artificially cheap to maintain China's cheap labor advantage.
At the same time the United States, Britain and others have encouraged their central banks to pump money into the system as a means of stimulating the economy.
"We are going to see the recovery of nationalism and protectionism, I think we're going to face some type of currency war," said Jose Sergio Gabrielli de Azevedo, president and CEO of Brazilian oil giant Petrobras.
"The U.S. is going to try to use weak dollar policy to help recovery in the U.S., and Brazil, India are not going to accept that and will fight back, and then we're going to see some struggle and conflicts," he said.
His words echoed concerns expressed by many participants of the World Economic Forum in Davos, Switzerland, this week, where ways to maintain the fragile global recovery — and risks to it — are being hotly debated.