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By Dasha Afanasieva
BELEK, Turkey, Nov 16 (Reuters) - Global coordination of macroeconomic policies has become more difficult, and more necessary, given the backdrop of declining trade and commodity prices and volatile markets, China’s special envoy on G20 affairs said on Monday.
Leaders of the world’s largest economies have pledged at a Group of 20 (G20) summit in Turkey to boost growth and implement macroeconomic policies in a “cooperative” manner, according to a draft of their communique seen by Reuters.
But coordinating policy remains difficult in practice, Wang Xiaolong told reporters at a news briefing at the summit.
“We have seen economic trends, as well as policies of major economies, have displayed different directions and it has become more necessary to coordinate macroeconomic policies,” he said.
“The difficulty in such coordination is also rising. We have seen that trade is declining as well as commodity prices which continue to fluctuate... and there have been some fluctuations on the financial markets.”
The divergence of policy has been a thorny issue for financial markets and policymakers this year, as the U.S. Federal Reserve looks like to hike rates, while much of the rest of the world struggles to kickstart growth.
Expectations of a U.S. rate hike have boosted the dollar, often to the detriment of emerging market currencies.
Wang also said that IMF chief Christine Lagarde briefed G20 leaders on the recent recommendation by IMF staff that China’s yuan currency should be included in the institution’s currency basket, without giving further details.
The IMF is expected to this month approve the inclusion of the yuan, also known as the renminbi, into its $280 billion basket of currency reserves, known officially as Special Drawing Rights, or SDR.
Its inclusion in the basket would mark a major diplomatic victory for Beijing’s campaign to internationalise the currency. (Writing by David Dolan; Editing by Nick Tattersall)