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Forex rates won't be big issue at G20 - sources

Published 11/02/2009, 04:55 AM
Updated 11/02/2009, 04:57 AM

(This story is filed without a dateline to protect the identity of the sources)

Nov 2 (Reuters) -- Foreign exchange rates are not expected to be a major topic at this weekend's meeting of Group of 20 finance officials but the issue may be discussed in relation to rebalancing the world economy, G20 sources said on Monday. Some European, particularly French, officials have complained over the last few months that the strength of the euro against the dollar is hurting the euro zone economy.

The European Union commissioner for the economy, Joaquin Almunia, called last week for coordination on exchange rates between major economies to ensure rates did not move excessively in one direction. [ID:nLT265111]

Japanese officials have said they may become concerned about strength of the yen .

But several G20 sources, speaking to Reuters on condition of anonymity, indicated there would not be serious talks this weekend about individual exchange rates, though the issue of currencies in general might be raised during discussions on reducing the world's economic imbalances.

"It won't be a major topic. But it may be discussed in the broader context of the global economy," one source said.

The G20 will not agree to issue a strong message on exchange rates unless the dollar weakens more sharply from current levels, the source added.

The sources also noted that the G20, which includes the world's richest economies as well as big developing nations such as China and India, did not discuss currencies in detail at the September summit of its leaders in Pittsburgh.

The weekend's meeting of finance ministers and central bankers in Scotland will not try to expand the G20's activity in this area, the sources said.

The communique issued by the Pittsburgh meeting included a vague call for "market oriented exchange rates that reflect underlying economic fundamentals", but it did not make more specific references to currencies. (Editing by Andrew Torchia)

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