G20 currency pledge is 'significant' - Mexico finance official

MEXICO CITY Sun Feb 17, 2013 6:03pm IST

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 February 16, 2013. REUTERS/Sergei Karpukhin

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 February 16, 2013.

Credit: Reuters/Sergei Karpukhin

Related Topics

MEXICO CITY (Reuters) - A promise by Group of 20 nations to avoid a currency war is an important step but it is unclear whether it will lead to a change in their policies, Mexican Deputy Finance Minister Fernando Aportela said on Saturday.

At a meeting in Moscow, G20 finance ministers and central bankers pledged to refrain from competitive devaluations and said monetary policy would be directed only at spurring price stability and growth, wording very close to a statement by Group of Seven rich countries earlier in the week.

"It was very clear that embarking on competitive devaluations is not something which is sustainable," Aportela said in a telephone interview from Moscow following the meeting. "That promise, coupled with the G7 promise, is very significant."

Monetary easing by developed nations, including Japan and the United States, has helped economic growth but also unleashed destabilizing capital flows into emerging markets, including Mexico, where foreign holdings of government debt are at record highs.

Capital inflows tend to push up the exchange rate of recipient countries, making exports less competitive. China said at the meeting in Moscow that developed nations should take note of "spillover" effects.

Aportela said it was hard to say whether developed countries would actually change their policies as a result of the G20 promise.

"It's difficult to make a forecast," he said.

G20 countries also deferred setting new fiscal targets to replace those agreed in Toronto in 2010, which will expire this year. Aportela said he hoped G20 leaders would agree on new debt and deficit goals at their summit in St. Petersburg.

(Reporting by Krista Hughes; Editing by Paul Simao)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Earnings Season

REUTERS SHOWCASE

Record Highs

Record Highs

BSE Sensex, Nifty hit record highs, insurers gain  Full Article 

Global Growth

Global Growth

IMF cuts outlook, warns of stagnation risk in rich nations  Full Article 

Monsoon Revives

Monsoon Revives

Monsoon revival keeps rain above average   Full Article 

Tackling Food Prices

Tackling Food Prices

India to free up extra 10 million tonne wheat in open market  Full Article 

Just Not Enough

Just Not Enough

Amazon's smartphone fails to kindle a "Fire" among reviewers.  Full Article 

Struggling Economies

Struggling Economies

Asian economies to struggle on weak export demand - Reuters poll  Full Article 

Rising Market Value

Rising Market Value

Facebook goes express to mega-cap status  Full Article 

Mining Roadblock

Mining Roadblock

Coal India's plans for 20 mines hit by land, environment delays  Full Article 

Power Jolt

Power Jolt

UAE's TAQA pulls out of India power plant deal with Jaiprakash  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage