G20 vows to support financial stability, sustainable growth

2013-02-16 20:47:40 GMT2013-02-17 04:47:40(Beijing Time)  Xinhua English

Finance ministers and central bankers of the Group of 20 (G20) on Saturday pledged to strengthen financial stability and promote sustainable growth at the conclusion of a two-day meeting here.

In a joint communique issued following the meeting, the finance officials vowed to promote more market-determined exchange rate systems and let exchange rate flexibility to reflect underlying fundamentals.

They recognized the "adverse implications" of volatile financial flows and exchange rates for economic stability, reaffirmed their commitment to refrain from competitive devaluation.

"We will not target our exchange rates for competitive purposes, will resist all forms of protectionism and keep our markets open," said the communique.

The Japanese Yen has plunged against other major currencies recently following moves by Japan's new leaders to ease monetary policy and stimulate the economy, sparking fears of a new round of "currency war."

But several high-ranking officials form major international financial institutions called the hypothetical conflicts over currencies as "rootless" and "pointless."

Angel Gurria, Secretary General of the Organization for Economic Cooperation and Development (OECD) said on the first day of the meeting that the term "currency war" was out-of-date and should not be discussed at the G20 level.

Instead of being distracted by the old jargon, today's policy makers should focus more on productivity and competitiveness, Gurria said.

International Monetary Fund (IMF) chief Christine Lagarde said that though the imbalance of economic recovery has posed pressures on various countries, the IMF review showed relevant currencies have been fairly valuated.

European Central Bank chief Mario Draghi also rebuffed the currency war rhetoric, saying exchange rates were not policy goals, but played important roles in promoting growth and stabilizing prices.

Meanwhile, the ultra-loose monetary policies adopted by major developed countries also caused concerns from their developing partners in the meeting, since currency devaluation negatively affected the export and foreign reserves of emerging economies.

During the Moscow meeting, developed countries pledged to consider the spillover effect of their macro-economic policies, especially the monetary policies on the world economy in general and developing countries in particular.

Russian Finance Minister Anton Siluanov urged some countries to bear in mind the risks of adopting loose monetary policies, noting the global rebalance should be achieved via a series of measures instead of mere exchange rates adjustment.

Besides exchange rates and monetary policy, long-term growth was another central topic for discussion.

Chinese Finance Minister Xie Xuren and Governor of the People's Bank of China Zhou Xiaochuan outlined key points of the Chinese government's economic policy during the meeting, saying China's sustainable development has contributed to the global recovery and growth.

Their remarks were echoed in the communique, which claimed that important political steps taken in the United States, Europe and Japan, as well as sustainable economic growth in China lowered major economic risks facing world economy and boosted the financial markets.

With fragile global recovery and bleak employment figures, participants of the meeting recognized the weakness of economic growth, pledging to reduce global imbalances and continue structural reforms so as to achieve strong, sustainable and balanced growth, the communique said.

International financial architecture reform was another main topic of the meeting. G20 members reaffirmed the urgent need to ratify the 2010 IMF quota and governance reform, vowing to reach an agreement on the quota formula and complete the general quota review by January 2014 as agreed at the Seoul Summit.

The G20 Moscow conference was the first major event chaired by Russia since it held the G20 rotating presidency in 2013.

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