Japan sees currency war hurtful
By Tomoko A. Hosaka |
October 23, 2010, Saturday
|
Print Edition
Print Edition
JAPAN warned yesterday that the global economy will lose if countries compete to devalue their currencies, as top finance officials from the world's leading economies gathered for two days of talks they hope will defuse growing tensions over exchange rates.
Economic "fundamentals should be reflected in foreign exchange rates," Japanese Finance Minister Yoshihiko Noda told reporters. "Excessive volatility in currency markets is harmful to the stability of the global economy and financial system."
Noda's comments underscore predictions that currency issues will take center stage at the meeting of finance ministers and central bank governors from the Group of 20 rich and emerging nations, which takes place ahead of a G20 leaders summit in Seoul next month.
The gathering in the South Korean city of Gyeongju comes just two weeks after the finance mandarins failed at a meeting in Washington to iron out differences that have led to fears of a currency war that could trigger another economic downturn.
Separately, China, Brazil, Russia and India - the BRIC countries - were holding a meeting ahead of the G20 gathering to discuss issues of mutual interest, including reform of the International Monetary Fund and increasing trade and investment among themselves, according to D.S. Malik, an official with India's Ministry of Finance.
Canadian Finance Minister Jim Flaherty said he met with his Chinese counterpart Xie Xuren yesterday. "I think there's a willingness to open the door to more flexibility over time," he said of China.
A South Korean government official said the fact finance officials are discussing the currency issue is itself a "good achievement."
The official, who spoke on condition of anonymity as discussions on the issue were ongoing, said he expects "some progress" at the meeting with language aimed at avoiding a "currency war."
"I don't know whether we can make it by the end of tomorrow or by (the) Seoul summit, but we believe and we hope that countries are willing to cooperate on that point," the official said yesterday.
The talks will help set the agenda for a November 11-12 summit of G20 leaders.
The Group of Seven met for informal talks before the full G20 gathering yesterday.
Economic "fundamentals should be reflected in foreign exchange rates," Japanese Finance Minister Yoshihiko Noda told reporters. "Excessive volatility in currency markets is harmful to the stability of the global economy and financial system."
Noda's comments underscore predictions that currency issues will take center stage at the meeting of finance ministers and central bank governors from the Group of 20 rich and emerging nations, which takes place ahead of a G20 leaders summit in Seoul next month.
The gathering in the South Korean city of Gyeongju comes just two weeks after the finance mandarins failed at a meeting in Washington to iron out differences that have led to fears of a currency war that could trigger another economic downturn.
Separately, China, Brazil, Russia and India - the BRIC countries - were holding a meeting ahead of the G20 gathering to discuss issues of mutual interest, including reform of the International Monetary Fund and increasing trade and investment among themselves, according to D.S. Malik, an official with India's Ministry of Finance.
Canadian Finance Minister Jim Flaherty said he met with his Chinese counterpart Xie Xuren yesterday. "I think there's a willingness to open the door to more flexibility over time," he said of China.
A South Korean government official said the fact finance officials are discussing the currency issue is itself a "good achievement."
The official, who spoke on condition of anonymity as discussions on the issue were ongoing, said he expects "some progress" at the meeting with language aimed at avoiding a "currency war."
"I don't know whether we can make it by the end of tomorrow or by (the) Seoul summit, but we believe and we hope that countries are willing to cooperate on that point," the official said yesterday.
The talks will help set the agenda for a November 11-12 summit of G20 leaders.
The Group of Seven met for informal talks before the full G20 gathering yesterday.
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