G20 vows to support financial stability, sustainable growth
MOSCOW - Finance ministers and central bankers of the Group of 20 (G20) on Saturday pledged to strengthen financial stability and promote sustainable growth at the conclusion of a two-day meeting here.
In a joint communique issued following the meeting, the finance officials vowed to promote more market-determined exchange rate systems and let exchange rate flexibility to reflect underlying fundamentals.
Finance ministers and central bank governors pose for a family photo during a meeting of G20 finance ministers and central bank governors at the Manezh Exhibition Center in Moscow, Feb 16, 2013. [Photo/Agencies]
They recognized the "adverse implications" of volatile financial flows and exchange rates for economic stability, reaffirmed their commitment to refrain from competitive devaluation.
"We will not target our exchange rates for competitive purposes, will resist all forms of protectionism and keep our markets open," said the communique.
The Japanese Yen has plunged against other major currencies recently following moves by Japan's new leaders to ease monetary policy and stimulate the economy, sparking fears of a new round of "currency war."
But several high-ranking officials form major international financial institutions called the hypothetical conflicts over currencies as "rootless" and "pointless."
Angel Gurria, Secretary General of the Organization for Economic Cooperation and Development (OECD) said on the first day of the meeting that the term "currency war" was out-of-date and should not be discussed at the G20 level.
Instead of being distracted by the old jargon, today's policy makers should focus more on productivity and competitiveness, Gurria said.
International Monetary Fund (IMF) chief Christine Lagarde said that though the imbalance of economic recovery has posed pressures on various countries, the IMF review showed relevant currencies have been fairly valuated.
European Central Bank chief Mario Draghi also rebuffed the currency war rhetoric, saying exchange rates were not policy goals, but played important roles in promoting growth and stabilizing prices.
Meanwhile, the ultra-loose monetary policies adopted by major developed countries also caused concerns from their developing partners in the meeting, since currency devaluation negatively affected the export and foreign reserves of emerging economies.
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