G20 nations pledge "all policy tools" to strengthen global recovery
Feb 28 2016
Shanghai: Finance ministers and governors of central banks gathered at the G20 summit in Shanghai are continuing meetings on Saturday seeking deals to boost global economic growth, and to halt terrorist funding.
"It's also important that all G20 honor their commitments to refrain from competition devaluation and to not target exchange rates for competitive purposes".
Policymakers from the Group of 20 big developed and emerging economies said they would use "all policy tools - monetary, fiscal and structural - individually and collectively" to strengthen growth and financial stability.
Companies and investors were looking to the Shanghai meeting for reassurance and action.
The G20 communiqué cited a list of specific risks the world faces, including volatile capital flows, falling commodity prices and rising geopolitical tensions, along with "the shock of a potential United Kingdom exit from the European Union and a large and increasing number of refugees in some regions". The fund also said it may further downgrade the figure when it publishes its next forecast in April.
The statement said that growth should continue at a "moderate pace" in advanced economies and "remains strong" in developing countries.
"There is no basis for persistent renminbi depreciation from the perspective of fundamentals", People's Bank of China chief, Zhou Xiaochuan, said Friday, adding, "We will not resort to competitive devaluations to boost our advantage in exports".
A surprise change in August in the mechanism Beijing uses to set its exchange rate prompted fears that the yuan might be weakened to support struggling Chinese exporters.
The G-20 said in the Shanghai communique that "we will consult closely on exchange markets", language that wasn't included in its September statement.
Steep losses on global stock markets and volatility in currencies this year fueled calls for G-20 members to do more to stoke economic growth and bolster stability.
But the document did not express any explicit concerns over China, where growth has slowed to its weakest in 25 years. "It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy,"_ - German Finance Minister Wolfgang Schaeuble says the debt-financed growth model has reached its limits".
Speaking to reporters after the meeting, the U.S. Treasury Secretary Jack Lew welcomed the agreement to avoid the devaluation of currencies and urged governments to push ahead with reforms.
"Central bankers have done their bit in recent years to stabilize the world economy", said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong.
From left, Germany's Federal Bundesbank Jens Weidmann, IMF Managing Director Christine Lagarde, OECD Secretary-General Jose Angel Gurria and U.S. Federal Reserve Board Chair Janet Yellen take their seats for a family photo of G20 Finance Ministers and Central Bank Governors Meeting at the Pudong Shangri-la Hotel in Shanghai, Feb. 27, 2016.
China's finance minister Lou Jiwei said a proactive monetary policy was needed now for the world's second-largest economy to implement the structural reforms but Beijing would also strike a balance between the short-term effect and long-term benefits in policymaking.
In a video message to the G20 Finance Ministers and Central Bank Governors Meeting, Chinese Premier Li Keqiang reiterated that China has the confidence to handle the complex economic situation at home and overseas.
"When formulating macroeconomic policies, G20 members need to keep in mind not just their own growth".