By Michael Stumo:
The White House opposition to an effective regime to control currency undervaluation globally derives, in part, from their reliance on impotent efforts at international dialogue. One venue for that dialogue is the G20 meetings.
The G20 Finance Ministers and Central Bankers periodically meet to discuss global economic issues and coordination. The recent meeting on September 4 and 5 was in Ankara, Turkey.
They usually release a statement at the end of the meeting, and that statement usually addresses currency/monetary devaluation and/or global current account imbalances (trade imbalances). And the statement usually amounts to no action or improvement in the global currency wars.
The G20 statement (they call it a “communique”) released on September 5 had this to say on currency.
2. We reaffirm the role of macroeconomic and structural policies to support our efforts to achieve strong, sustainable and balanced growth. Monetary policies will continue to support economic activity consistent with central banks’ mandates, but monetary policy alone cannot lead to balanced growth. We note that in line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies. We reiterate our commitment to move toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments. We will refrain from competitive devaluations, and resist all forms of protectionism. We will implement fiscal policies flexibly to take into account near-term economic conditions, so as to support growth and job creation, while putting debt as a share of GDP on a sustainable path. To this end, we will also continue to consider the composition of our budget expenditures and revenues to support productivity, inclusiveness and growth.