G-20 leaders agree to refrain from 'devaluing' currency

V S Chandrasekar
Seoul, Nov 12 (PTI) In the face of a currency war between
the US and China, global leaders including Prime Minister
Manmohan Singh Friday agreed to refrain from "competitive
devaluation" and bring in exchange rate flexibility to ensure
that no country gets undue advantage.
"We will move towards more market determined exchange
rate system and enhance exchange rate flexibility to reflect
underlying economic fundamentals and refrain from competitive
devaluation of currencies.
"Advanced economies including those with reserve
currencies will be vigilant against excess volatility and
disorderly movement in exchange rates," G-20 leaders declared
at the end of their 2-day Summit here, in the backdrop of the
US demanding that Chinese currency Yuan be up-valued to check
the Asian giant from taking advantage in international trade.
These measures, the leaders said, would help mitigate the
risk of excessive volatility in capital flows facing some
emerging market economies.
"We must at all costs avoid competitive devaluation and
resist any resurgence of protectionism," Singh said at the
Summit of the leaders of the world's most influential
developed and developing countries.
Singh had earlier called for an end to competitive
devaluation of currencies, even as Indian officials back home
said that the country was capable of absorbing robust capital
inflows of up to USD 75 billion.
The Seoul Action Plan, agreed at the end of the two-day
Summit of the G-20 leaders, called for moving towards more
market-determined exchange rates.
An undervalued Yuan or a weak Dollar also has
ramifications for India and several other countries in terms
of their exports becoming uncompetitive.
The G-20 group includes India, the US, China, Germany,
France, Brazil, Russia and Japan. MORE PTI TEAM
PBL


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