But this shift towards greater domestic demand growth in Asia will not come about smoothly if those countries currently operating under fixed or tightly managed exchange rates do not begin to promote  BIS Review 6/2006  1  greater nominal exchange rate flexibility.
If this does not happen, there is a risk that countries with floating exchange rates, like Canada, may have to bear more than their fair share of the burden of resolving the imbalances. There is also a risk that protectionist measures could be taken worldwide, hurting all trading nations, including Canada.