“Group of 20 finance chiefs shifted toward a tougher stance on exchange rates as they sought to tame speculation of a global currency war without singling out Japan for criticism.
After all-night negotiations in Moscow, the club of the biggest developed and emerging economies agreed not to “target our exchange rates for competitive purposes,” according to an official who saw a draft of a statement to be released today and asked not to be identified because the document isn’t public yet. That marks a strengthening of language from previous drafts and runs closer to what the Group of Seven rich nations said earlier this week.
“It was quite clear last night that everyone around the table wants to avoid any sort of currency disputes,” Canadian Finance Minister Jim Flaherty told reporters today. U.K. Chancellor of the Exchequer George Osborne said countries must avoid their past mistake of using currencies “as a tool of economic warfare.”
Policy makers are attempting to soothe concern that governments are increasingly trying to weaken exchange rates to spur growth through exports. The risk is a 1930s-style spiral of devaluations and protectionism if other countries retaliate to safeguard their own economies.