G20 face tough task on currencies
Global finance mandarins get another chance this week to defuse international currency tensions as a festering dispute over exchange rates overshadows debate about reforming the world economy.business Updated: Oct 21, 2010 20:24 IST
Global finance mandarins get another chance this week to defuse international currency tensions as a festering dispute over exchange rates overshadows debate about reforming the world economy.
Finance ministers and central bank governors from the Group of 20 rich and emerging nations, along with key officials from international finance and lending organisations, meet on Friday and Saturday in the South Korean city of Gyeongju. Their deputies met on Thursday.
The gathering comes just two weeks after they failed at a meeting in Washington to iron out differences that have led to fears the world could descend into a so-called currency war that causes another downturn.
In such a scenario, countries devalue their currencies to gain a competitive advantage over competitors in a less-than-robust world economy that has yet to fully recover from the effects of the global financial meltdown two years ago.
David Cohen, head of Asian forecasting at Action Economics in Singapore, said the finance meeting represents a "real test" for the G-20 given the prominence it has assumed in leading the global economy.