Turkey Sees China Joining G-20 Unity Against 'Currency Wars'

  • Deputy PM Yilmaz says group against competitive devaluations
  • Communication on future of global monetary policies needed

Chinese President Xi Jinping, left, arrives at the Antalya International Airport for the G20 Turkey Leaders Summit.

Photographer: Anadolu Agency/Getty Images

Group of 20 nations including China are united in rejecting policies that risk triggering currency wars while trying to bolster economic growth, according to the Turkish host government.

Currency devaluations should reflect market realities rather than become policy tools for national governments, Turkey’s Deputy Prime Minister Cevdet Yilmaz said Saturday in the Mediterranean city of Antalya, where world leaders will gather for a two-day summit starting Sunday.

Yilmaz’s comments suggest G-20 concerns may be easing that China could further devalue the yuan as economic growth slows. The G-20 meeting of finance ministers which Yilmaz hosted in September called on member states to “refrain from competitive devaluations” as finance chiefs from the world’s largest economies sought to contain the tensions from China’s August devaluation of its currency.

“Everyone is against competitive currency devaluation. But China has assured the group that it wouldn’t go on that path,” Yilmaz told reporters. “There is no expectation of a currency war.”

Equally important is that governments should refrain from raising trade barriers to protect domestic industries, he said. There is also a growing need for better communication on the future of monetary policies as different sets of challenges facing economies around the world are causing policy divergence, said Yilmaz.

“Although there is a recovery from the global economic recession, that recovery is neither strong enough nor equal in all parts of the world,” said Yilmaz. “The U.S. is growing while commodities exporters such as Brazil and Russia are facing economic troubles and China sees expansion slow down,” Yilmaz said. While regional differences are normal, “what everyone needs is that these policies should be coordinated and supplementary to each other,” he said.

Turkey, which holds the G-20’s rotating presidency, is working on an action plan that sums up its findings from the group’s meetings that focused over the past year on how to accelerate global economic growth, Yilmaz said. The so-called Antalya Action Plan will be released separately from the final G-20 communique and will contain solid policy proposals to tackle issues from unemployment among young people and women to channeling more funds to infrastructure investments, he said.

The G-20 consists of Turkey, the U.S., Russia, China, Italy, France, Germany, the U.K., Canada, Japan, Australia, Indonesia, Brazil, Argentina, Mexico, India, South Korea, Saudi Arabia and South Africa, plus the European Union.

(See {GMEET <GO>} for more on the G-20 summit.)
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