U.S. trade deficits likely to continue

WASHINGTON, July 23 (UPI) -- Big imbalances between the debt-laden United States and its cash-rich trading partners are likely to persist longer than expected, an economic official says.

John Lipsky, deputy managing director of the International Monetary Fund, says even though the relative value of the U.S. dollar has fallen by 25 percent since 2002, U.S. trade deficits likely will continue, USA Today reported Wednesday.

"Large imbalances may be with us longer than we had originally envisaged," Lipsky said in a speech at the Brookings Institution, adding that the IMF now believes the dollar is the closest it has been to a sustainable value in a decade, while the euro is seen as overvalued.

USA Today said the IMF has joined the U.S. Treasury Department in calling for China to allow the yuan to rise faster against the dollar, but Chinese leaders are against the idea because they fear its potential impact on currency market stability.