Sri Lanka joins chorus against Fed QE2

Feb 25, 2011 (LBO) - Sri Lanka joined the chorus of developing nations voicing concerns about the negative effects of Federal Reserve's latest money printing exercise known as 'quantity easing' at an Asian monetary forum newly backed by China. Ultra loose US monetary policy has flooded developing countries that are pegged to the US dollar with capital and sent global commodity prices bubbling up again.

QE2

Sri Lanka's president Mahinda Rajapaksa said the world has been " anxiously watching while massive quantities of new money injected by the USA in to their economy and through such infusions into the entire world."

"It is widely expected that such infusions while possibly stimulating growth and employment within the nation, would have a massive negative impact on the rest of the world," Rajapaksa said at an Asian central bank chief forum in Sri Lanka's capital Colombo.

"Hence it may have been more appropriate if such an intervention was done in consultation with multilateral institutions and other key players."

The South East Asian Central Banks (SEACEN) governors’ conference has received a shot in the arm this year with the entry of China, a dollar pegged country that is among the largest of US securities h