- REUTERS/Mikhail Kireev
There is a shared belief among the members of the Group of 20 leading economies in the need to “double down” against competitive currency devaluation and avoid it in both policy and language, a senior US Treasury official said on Saturday.
Speaking to reporters on the sidelines of the G20 meeting of central bankers and finance ministers in the Turkish capital of Ankara, the official also said that China appears to have learned about the importance of transparency in the communication of monetary policy from its latest market turmoil.
“There is a clear understanding that competitive devaluation presents a threat that everyone has to be on guard against, both in their policies and their words,” the senior official said, according to The Wall Street Journal.
China devalued its currency last month, in a sign that it was trying to make its exports more competitive amid a foundering economy, as Business Insider Australia reported at the time.
Other countries – including Vietnam and Kazakhstan – followed suit and devalued their own currencies, as The Journal noted. The Journal wrote that Japan’s subsequent suggestion that it might devalue its own currency inflamed fears that “China’s depreciation might have sparked a dangerous round of global depreciations.”
The senior Treasury official’s statements Saturday seemed to be a reaction to those fears.
(Reuters Reporting by David Dolan; Editing by Nick Tattersall)