G20 vows to reduce imbalances, avoids hard targets

Published 10/23/2010, 04:02 AM
Updated 10/23/2010, 04:04 AM

GYEONGJU, South Korea, Oct 23 (Reuters) - The Group of 20 advanced and emerging economies agreed on Saturday to move towards market-determined exchange rates and to pursue the full range of policies needed to reduce excessive external imbalances.

A statement issued after two days of talks contained no numerical targets for current account surpluses or deficits -- an idea advocated by the United States.

Instead, the group said that persistently large imbalances -- to be assessed against indicative guidelines yet to be agreed -- would warrant an assessment by the International Monetary Fund.

In a nod to the concern of China and others that lax U.S. policies risk undermining the dollar, the communique said advanced economies would be vigilant against excess volatility and disorderly movements in exchange rates.

The G20 also agreed to a doubling of IMF quotas, or membership subscriptions, as part of a broader deal to shift more than 6 percentage points of voting power in the fund to dynamic emerging economies such as India, China, Brazil and Turkey.

For the full G20 communique, click on [ID:nTOE69M01E] (Reporting by Alan Wheatley; Editing by Tomasz Janowski)

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