Finance ministers and central bankers from the Group of 20 developed and emerging economies who met in Moscow on Feb. 15-16 have issued a communique stressing the need for G-20 member countries to refrain from actions that might confuse currency markets — such as actions aimed at driving down the value of their own currencies.
The communique came out amid a significant weakening of the yen as a result of Prime Minister Shinzo Abe's policy of pursuing massive monetary easing. Although Mexico had criticized Japan during the meeting for trying to achieve economic growth by weakening the yen, Japan managed not to be singled out for criticism in the communique for driving down the value of the yen through manipulation. Instead, the communique said, "We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes."
Officials of emerging economies also expressed strong dissatisfaction over the market turbulence that could result from monetary easing in developed economies. The easing could encourage inflows of money that push up food prices as well as perhaps cause economic bubbles.
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