The United States respects the rule of law. We expect our trading partners to do the same. Unlike some other approaches to currency manipulation, this bill is WTO-compliant. It sets consequences for countries that want to access the U.S. market but don’t play fair. We’re not picking a fight with anyone. Today, the problem country is China. Tomorrow, it may be Country X. This enforcement structure could apply to any trading partner with out-of-whack currency. It gives a good chance for self-correction before penalties ramp up. It’s a velvet glove with a steel fist inside. – U.S. Senator Charles Grassley (R-IA) announcing Currency Exchange Rate Oversight Reform Act, June 13

The change we are making is the first major revision in the surveillance framework in some 30 years, and it is the first ever comprehensive policy statement on surveillance. The new decision... gives clear guidance to our members on how they should run their exchange rate policies, on what is acceptable to the international community, and what is not. To three existing principles relating to exchange rate manipulation pursued for certain purposes, and to when and how it is desirable to intervene in the foreign exchange rate markets, the decision adds a fourth principle: “ A member should avoid exchange rate policies that result in external instability”. – Rodrigo Rato, Managing Director, International Monetary Fund, Montreal, June 18

The revised decision sends a strong message that the IMF will put exchange rate surveillance back at the core of its duties and rigorously implement its rules on exchange rate surveillance going forward. The revised decision also demonstrates that the IMF is serious about reforming itself and enhancing its legitimacy and relevance in today’s global economic and financial system. – U.S. Treasury Secretary Henry Paulson, June 18