Global finance chiefs are seeking to find common ground on currencies after an effort to calm tensions between rich governments backfired.
Group of 20 finance ministers and central bankers begin talks in Moscow today with investors seeking clarity on how comfortable they are with a sliding yen. Questions are being asked after the Group of Seven united around a pledge not to target exchange rates only to divide over its meaning for Japan.
Brazilian Finance Minister Guido Mantega, who coined the phrase “currency war” in 2010, said all nations would lose from a spiral of devaluations, adding that it’s not enough for the G-20 countries to say they’ll prohibit such a situation. Europe should ease fiscal restraints, he said in an interview in Moscow.
The International Monetary Fund sought to ease concerns about exchange-rate volatility yesterday, calling talk of currency wars “overblown.” The G-20’s final communique won’t include a separate statement about Japan or highlight the phrase “currency war,” Russian Deputy Finance Minister Sergei Storchak told reporters in Moscow today.