MOSCOW: G20 finance ministers today moved to calm fears of looming economic warfare on the currency markets, pledging they would not target specific forex rates or devalue currencies to make them more competitive.
The jitters — similar to previous disputes with China — have been set off by Japan’s plan of monetary easing to boost inflation and activity by reducing the value of the yen under new Prime Minister Shinzo Abe.
The communique after the G20 finance meeting in Moscow under Russia’s presidency said they will refrain from competitive devaluation and will not target their exchange rates for competitive purposes.
It echoed a similar recent statement by the G7 richest nations which like the G20 statement was also approved by Japan, whose monetary policy has been vehemently criticised by the West in recent weeks.
The statement made clear that forex rates should be set by markets, and not intervening governments.