Competitive devaluations cited as worldwide threat

Efforts are needed to avoid a worldwide competitive devaluation of currencies triggered by trade frictions, said Zhou Xiaochuan, former governor of the People's Bank of China, speaking at the two-day Lujiazui Forum, which attracted government, business and academic leaders from home and abroad and ended on Friday in Shanghai.

Zhou said the nonprofit Financial Stability Board, which monitors and makes recommendations about the global financial system, should help avoid such a devaluation, thereby giving a more positive signal to the global financial market. The issue is timely given the approach of the G20 Osaka Summit on June 28 and 29, he said.

Zhou said trade problems will again trigger competitive devaluations, as in the last global financial crisis. He said fiscal and central bank regulators of different countries reached an earlier consensus to make joint efforts to avoid competitive devaluation.