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:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Republic Day

Reuters Showcase

RK Laxman Dead

RK Laxman Dead

'Common Man' cartoonist RK Laxman dead at 93  Full Article 

Banking Revolution

Banking Revolution

India turns to corner shops, mobile phones for banking revolution.  Full Article 

Nuclear Group

Nuclear Group

China urges India to take steps to satisfy standards of NSG  Full Article 

Gold Market

Gold Market

Chinese gold demand holds up ahead of holiday, Indian buying weak  Full Article 

India-U.S. Relations

India-U.S. Relations

Column - U.S. and India should join to balance China's rise  Full Article 

Padma Bhushan

Padma Bhushan

India honours Bill Gates with civilian award  Full Article 

Fashionable Modi

Fashionable Modi

When Modi met Obama, his name was all over - his suit  Full Article 

New Greek PM

New Greek PM

Greek leftist Tsipras sworn in as PM to fight bailout terms  Full Article 

Australian Open

Australian Open

Venus fireworks illuminate Australia Day  Full Article 

Reuters India Mobile

Reuters India Mobile

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