Consensus eludes at G20 on currency woes
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Nov. 11: Amidst an escalating currency war between the United States and China and differences on trade imbalances, negotiators at the G20 Summit were struggling to find a common ground on a joint communique that was expected to speak out against competitive devaluation of currencies and protectionism, taking on board India’s concerns.
Indian sources said that notwithstanding the strong views held by the US and China on issues like currency valuation and trade deficits and surpluses, a consensus is evolving on the need for countries not to resort to competitive devaluation or undervaluation, a stand the G20 finance ministers took at their meeting in South Korea just last month.
China has been strongly resisting attempts by the US to revalue its yuan, as a low-er value gives it a tremendous export advantage over other countries. But the US Federal Reserve’s decision to pump $600 billion into the sluggish American eco-nomy, effectively devaluing the dollar, has also not been taken to kindly by countries like Germany.
Notwithstanding the summit spokesman, Mr Kim Yoon-kyung’s, claim that major countries are deadlocked on issues, Indian sources said the outlook was not all that gloomy and a consensus document on many issues was likely to be hammered out during Summit proceedings on Friday. Sources said the joint communique is expected to call for countries to desist from competitive devaluation, a point the Indian Prime Minister, Dr Manm-ohan Singh, is expected to tell the Summit on Friday morning.
India would favour adva-nced countries with deficits following policies of fiscal consolidation against the backdrop of their individual problems to ensure debt sustainability. India attaches significance to the Seoul Summit, which is the first G20 meeting in a non G-8 country and that too, in an Asian nation that has rece-ntly emerged as an industrialised country.
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