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

REUTERS SHOWCASE

Scotland Referendum

Scotland Referendum

Scots vote in record numbers, await independence verdict.  Full Article 

India-US Diplomacy

India-US Diplomacy

Obama to nominate Indian-American Richard Verma as India ambassador - congressional source.  Full Article 

GMR in Nepal

GMR in Nepal

Nepal clears India’s GMR plan for $1.4 bln hydroelectric plant.  Full Article 

LIC on Markets

LIC on Markets

LIC chairman bullish on Indian markets  Full Article 

India Rains

India Rains

Monsoon rains weaken as late retreat looms.  Full Article 

Ellison Quits

Ellison Quits

Oracle's Ellison steps aside, co-CEOs Catz and Hurd take over.  Full Article 

Infosys-Huawei

Infosys-Huawei

Infosys partners with China's Huawei for cloud-based services  Full Article 

Gold Outlook

Gold Outlook

Gold imports seen up, premiums likely to double on festive buying  Full Article 

Trade Dispute

Trade Dispute

U.S. to press India on trade row during Modi's Washington visit  Full Article 

Reuters India Mobile

Reuters India Mobile

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