G20 nations, including China, are united in rejecting policies that risk triggering currency wars while trying to bolster economic growth, according to the Turkish host government.
Currency devaluations should reflect market realities rather than become policy tools for national governments, Turkish Deputy Prime Minister Cevdet Yilmaz said on Saturday in the Mediterranean city of Antalya, where world leaders gathered for a two-day summit yesterday.
Yilmaz’s comments suggest G20 concerns might be easing that China could further devalue the yuan as economic growth slows. The G20 meeting of finance ministers, which Yilmaz hosted in September, called on member states to “refrain from competitive devaluations” as finance chiefs from the world’s largest economies sought to contain the tensions from China’s August devaluation of its currency.
“Everyone is against competitive currency devaluation. But China has assured the group that it would not go on that path,” Yilmaz told reporters. “There is no expectation of a currency war.”
Equally important is that governments should refrain from raising trade barriers to protect domestic industries, he said. There is also a growing need for better communication on the future of monetary policies as different sets of challenges facing economies around the world are causing policy divergence, Yilmaz said.
“Although there is a recovery from the global economic recession, that recovery is neither strong enough nor equal in all parts of the world,” Yilmaz said. “The US is growing while commodities exporters such as Brazil and Russia are facing economic troubles, and China sees expansion slow down.”
While regional differences are normal, “what everyone needs is that these policies should be coordinated and supplementary to each other,” he said.
Turkey, which holds the G20’s rotating presidency, is working on an action plan that sums up its findings from the group’s meetings that focused over the past year on how to accelerate global economic growth, Yilmaz said.
The so-called Antalya Action Plan is to be released separately from the final G20 communique. |
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