G-20 May Discuss Exchange-Rate Coordination, ECB's Coeure Saysby
European Central Bank Executive Board member Benoit Coeure suggested that Group of 20 nations this month will discuss ways to coordinate their exchange-rate policies amid the decline in currencies of major emerging markets.
“There’s a risk that their currencies will continue falling,” Coeure said in an interview Monday with BFM, a French television network, referring to top emerging economies. “That’s an issue of global coordination, and that will be discussed in Shanghai.”
G-20 finance ministers and central-bank governors will meet Feb. 26-27 in Shanghai. Emerging market currencies have fallen about 8 percent over the last year, according to the MSCI Emerging Markets Currency Index. Some analysts say there may become a need for a new global currency pact, in the vein of the 1985 Plaza Accord, when economic leaders united at a New York hotel to weaken the dollar.
At a meeting in Turkey in September, G-20 finance chiefs reiterated their commitment to “move toward more market-determined exchange rate systems and exchange-rate flexibility to reflect underlying fundamentals.” They also pledged to avoid “persistent exchange-rate misalignments.”