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12 February 2013

FT: G7 fails to defuse currency tensions


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The Group of Seven nations took the unusual step of issuing a public statement to address rising concerns over a fresh round of global "currency wars".


“We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates”, the ministers and governors said. “We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.”

As G7 unity crumbled, the Bank of Canada’s governor said the world’s richest economies should not use monetary policy to target exchange rates. “It is extremely important  that we as a G7 go in united and forcefully to the G20 to enlarge that commitment as quickly as possible amongst the major emerging economies in the G20”, said Mark Carney.

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© Financial Times


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