The International Monetary Fund sought to ease concerns about exchange-rate volatility that will dominate this week’s Group of 20 nations meeting, calling talk of international currency wars “overblown.”
“Our multilateral assessment does not indicate very significant deviations from fair value for the relevant currencies,” IMF spokesman Gerry Rice told a news conference in Washington today.
Finance officials from G-20 nations start discussions in Moscow tomorrow, after conflicting statements about the weakening of the yen from Group of Seven officials roiled markets. Russia, which last month warned that the world was at the brink of a fresh “currency war” as countries seek to make exports more competitive, today urged the G-20 to take a stronger stance on currency manipulation.
“These are obviously developments to watch with an eye on a cooperative approach and, of course, the IMF will do its part in this effort,” Rice said.
Rice didn’t comment about the yen, which has tumbled 14 percent against the dollar in the past three months. Financial markets whipsawed two days ago as G-7 policy makers issued a statement viewed by investors as accepting a declining yen, only for officials to then split over whether Japan was being singled out.
Separately, Rice said the IMF is still in discussions over a bailout for Cyprus.
“We’re looking for a durable solution to Cyprus’s banking sector problems at low cost for taxpayers and consistent with debt sustainability,” he said.