(Adds Kudrin quotes)
By Gleb Bryanski
HORSHAM, England, March 14 (Reuters) - A global round of currency devaluations creates problems and the IMF remains a critical source of help for emerging economies in stabilising their exchange rates, Russia's finance minister said on Saturday.
Russia has devalued its rouble currency by one quarter against the dollar/euro currency basket since August in response to capital flight and falling prices for oil, its main export commodity.
Many other emerging and developed nations, including some of Russia's neighbours, have let their currencies devalue with varying degrees of resistance or encouragement, making their exports more competitively priced but increasing the burden of foreign currency debts.
"I would call it a devaluation contest ... Devaluation in one country leads to inevitable devaluations in other countries and creates problems," Russia's Alexei Kudrin told reporters after a meeting of G20 finance ministers south of London.
Kudrin said the IMF and smaller regional funds were the only sources of help for smaller economies in stabilising their currencies. "If a country has no foreign currency, it has to devalue and Ukraine is the most notable example," he said.
Ukraine has been squeezed hard by a collapse in demand for its steel exports and a global retreat by investors from emerging markets, sending its currency tumbling. Political infighting has complicated a deal with the IMF, which has suspended the second tranche of a $16.4 billion loan.
BOOST FOR BRICS
Kudrin said G20 finance ministers had discussed the exchange rate issue but not the Chinese yuan, which has been allowed to appreciate over the past few years but is still widely criticised as undervalued.
He said the U.S. dollar could weaken within the next two to three years against other currencies but he did not expect any dramatic fluctuations.
Kudrin said Russia and other major emerging economies had succeeded in boosting their clout in global financial affairs at the G20 finance ministers' meeting in Horsham near London on Friday and Saturday.
Just before the meeting, the Financial Stability Forum announced it would expand to include Brazil, Russia, China and India and all other G20 members -- one of Russia's stated goals leading up to the gathering.
The FSF is made up of central bankers and finance ministers, up to now mainly from the older economic powers, and looks at financial market supervision and surveillance.
"We have increased our influence in the global financial decision making. Key global issues will not be discussed without Russia," Kudrin said.
Kudrin said the BRIC countries, which issued their first ever joint communique on the sidelines of the G20 meeting, would have liked to see an immediate rebalancing of IMF quotas in favour of emerging economies but a compromise envisaging the rebalancing by January 2011 has been found.
He said the deepening economic crisis and a need to raise more capital for the IMF could soon force developed nations to agree to a rebalancing at an earlier date. He said Russia's quota would not be increased after the rebalancing.
"As soon as the IMF capital requirements become more acute the decision will be taken more quickly," Kudrin said, praising the World Bank for agreeing to a similar move by April 2010.
World Bank President "Robert Zoellick is acting faster in the interests of the bank's recapitalisation," Kudrin said.
Russia voted against the previous IMF quota rebalancing completed last year and called it "cosmetic".
Kudrin said the new U.S. administration was gathering strength but needed to fine-tune the mechanism of cooperation with other countries.
Kudrin said Russia will cooperate with OPEC countries rather than G20 on the issue of energy prices stability although he admitted OPEC's role had its limits. OPEC nations are meeting in Vienna on March 15.
He forecast Russia would see lower inflation in the second half of 2009 and capital outflows would be less than $100 billion, compared with $130 billion last year. (Reporting by Gleb Bryanski; Editing by Ruth Pitchford)