DUBAI, Sept 23: The International Monetary Fund (IMF) backed here on Tuesday a call by the Group of Seven (G7) industrialized states for more flexibility in exchange rates, at the start of the IMF’s annual meeting with the World Bank.

And the World Bank supported the demand of poor nations for lower agriculture subsidies in rich countries to improve their international trade and reduce poverty.

“Allowing greater exchange rate flexibility would be helpful both domestically and globally,” IMF managing director Horst Koehler said in his opening speech at the two-day meeting in the Gulf emirate of Dubai, attended by 16,000 delegates and journalists from 184 countries.

The finance ministers and central bank chiefs of the G7 issued on Saturday a veiled call for Asian countries, and notably China, to allow their currencies to rise in order to check the widening gap in the US current account deficit.

The G7 — Britain, Canada, France, Germany, Italy, Japan and the United States — after a meeting here also urged the International Monetary Fund to exercise “effective and persuasive surveillance” of the currency situation.

But Chinese Finance Minister Jin Renqing toed the line of preserving the stability of China’s yuan. “We take note of the concern about the renminbi (yuan) exchange rate,” Jin said in his speech.—AFP