WRAPUP 1-G7 to focus on rates, fiscal measures - Canada

By Louise Egan

OTTAWA, Feb 4 (Reuters) - The Group of Seven rich nations will focus on the impact on the global economy of interest rates cuts and Washington's fiscal stimulus package when they hold a high-level neeting in Tokyo on Saturday, a senior Canadian finance official said on Monday.

At the talks, the G7 finance ministers and central bank chiefs will also continue to stress the need for China to adopt a more flexible currency.

The official declined to comment on whether the group's message on China might be tougher than in the past or whether it might broaden its language on currencies to reflect the damaging impact of the weak U.S. dollar on the European and Canadian economies.

Unlike the last G7 meeting in October, when policymakers focused on how to improve liquidity in troubled financial markets, this meeting will be all about boosting confidence in the "real" economy, the official said on condition of anonymity.

That means taking stock of the action taken to date -- primarily the dramatic moves by the United States to cut its policy interest rate by 125 basis points, and the $150 billion U.S. stimulus package.

Those measures are welcome and will boost Canada's economy, the official said.

The Bank of Canada has also cut interest rates twice since December and has hinted at more cuts to come.

But Ottawa appears to have no plans to offer additional fiscal measures of its own to help the economy along, saying money is already flowing to Canadians from a big tax-cut package announced last October. The Conservative government cut a federal sales tax as of January and introduced a series of personal and business tax cuts to be phased in over several years.