Threats posed by excess currency volatility have been emphasised by the finance ministers and central bankers of the top 20 global economies or G20 at their ongoing meeting in Germany.
The G20 countries are expected to issue a final communique reiterating that “excess volatility and disorderly movements” in exchange rates can have “adverse implications” for economic and financial stability.
The United States has already said it would keep a close eye on the levels of key global currencies, but pursue policies in the interest of “economic growth that is good for the US and the rest of the world.
The finance ministers and central bankers of the G20 countries are now meeting in the German spa town of Baden Baden.
Signals have already come out of Germany that they will refrain from competitive devaluations and will not target exchange rates for competitive purposes.
Although the G20 countries have agreed on forex-related issues, they have not yet found a common ground on trade and financing against climate change in the face of President Donald Trump’s “America First” policy and his scepticism towards climate change.
Reports suggest the difficulty stems from a major shift in the views of the United States, where the new Trump administration is considering protectionist trade measures to curb imports and considers efforts to try to halt global warming a “waste of money”.
US Treasury Secretary Steven Mnuchin said in Germany at the weekend that the Trump administration had no desire to get into trade wars, but certain trade relationships need to be re-examined to make them fairer for US workers.
G20 officials said the United States was ready to accept a phrase backing “free and fair” trade, given that the meaning of “fair” was open to interpretation. Europe was keen on adding that trade should be “rules-based”, meaning subject to rules of the World Trade Organisation (WTO).
European delegations have also explicitly rejected protectionism.
Recently, President Trump proposed to take the axe to environmental financing, slashing funds in his first national budget proposal for the Environmental Protection Agency (EPA) by a third, as well as eliminate contributions linked to the UN climate change programmes.
Trump, who was elected to office in November last year, has called global warming a “hoax” concocted by China to hurt the US industry and vowed to scrap the earlier Paris climate accord aimed at curbing greenhouse gas emissions.
At Baden Baden, the world’s biggest economies have also pledged to “jointly fight” cyber-attacks on the global banking system, one of the biggest co-ordinated efforts yet to protect lenders since an $81mn heist of the Bangladesh central bank’s account last year.
They have vowed to promote the resilience of financial services and institutions in G20 jurisdictions against “malicious” use of information and communication technologies, including from countries outside the G20.
Cyber-crime became a top priority after an elaborate heist on the Bangladesh central bank’s account at the Federal Reserve Bank of New York last year, an unprecedented theft that exposed the vulnerabilities of the system.
Europe keen on adding that trade should be
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