MOSCOW (Reuters) - There is better understanding among Group of 20 nations that the foreign exchange rate systems of the world’s largest economies need to be better aligned, a senior U.S. administration official said on Saturday after G20 finance leaders met in Moscow.
While the Group of Seven industrialized countries - the United States, Britain, Italy, Germany, Japan, France and Canada - have long-standing rules on exchange rates, the newer G20 of emerging and advanced economies, including China, India and Brazil, is still trying to develop a set of common standards, the official said.
The G20 meeting committed to move more rapidly toward more market exchange rate systems and to refrain from competitive devaluation.
The wording of the final statement was closely followed given concerns that Japan is targeting a weaker yen in its aggressive expansive monetary and fiscal policies, which have driven down its currency.
G20 currency tensions are not new. The United States has long pressed China to reform its exchange rate regime by allowing market forces to play a larger role in managing the economy.
The U.S. administration official said G20 discussions were focused more on currency frameworks than on a particular country’s policies.
Meanwhile, the official said the United States was on target to meet a pledge by advanced economies at the G20 in Toronto in 2010 to halve their budget deficits by 2013. With the pact set to expire this year, some countries like Germany want the G20 to set new debt-cutting targets.
The U.S. official said the Moscow meeting wanted to avoid any commitment that there is a one-size-fits-all pace of fiscal consolidation. However, the official said the United States was comfortable with the way the fiscal consolidation effort was being discussed by the G20.
Reporting By Lesley Wroughton, editing by Mike Peacock