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G20 should give clear signal there is no currency war-IIF chief
February 11, 2013 / 5:00 PM / 5 years ago

G20 should give clear signal there is no currency war-IIF chief

WASHINGTON, Feb 11 (Reuters) - Finance ministers from the Group of 20 nations should send a clear signal to financial markets this week that they are coordinating policies and not embroiled in a “currency war,” the head of a global banking group said on Monday.

“Right now there seems to be a bit of a message void and that message void is filled by whoever has the microphone on a particular week,” Institute of International Finance Managing Director Timothy Adams told a news conference.

Adams, who served as U.S. Treasury undersecretary for international affairs during President George W. Bush’s administration, dismissed the idea that current tensions over foreign exchange rates amount to a “currency war.”

The Group of Seven rich nations are considering a statement this week reaffirming their commitment to “market determined” exchange rates.

The tensions have been prompted by Japan’s aggressively expansionary monetary policies, which have weakened the yen sharply.

“I don’t think it’s a currency war, maybe it’s a slight skirmish,” Adams told reporters. “It is less to do with policymakers targeting the exchange rate and more about policymakers trying to implement policies to deal with domestic conditions.”

“Policymakers still need to cooperate and communicate how they are going about it because markets are interpreting it as an effort to manipulate exchange rates,” he added. “Whether it was intended or not, it has happened that way, and policymakers need to communicate to markets that is not their intention and better explain to markets what they seek to achieve and do it in a way that minimizes potential volatility,” he Adams said.

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