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Yuan unlikely to be main issue at G20 - S.Korea fin min

Published 04/19/2010, 05:15 AM
Updated 04/19/2010, 05:32 AM

SEOUL, April 19 (Reuters) - The appreciation of China's yuan is unlikely to be a main issue during a finance ministerial meeting among the Group of 20 rich and emerging economies later this week, South Korea's finance minister said.

G20 finance leaders and the International Monetary Fund in Washington would discuss issues related to global financial regulations, energy subsidies and the economy, but were not expected to meet an agreement during the meeting, South Korean Finance Minister Yoon Jeung-hyun said on Monday.

"If the G20 meeting discusses a specific country's foreign exchange rates in public, it will be very limited ... We may see talks about foreign exchange rates, but they will be very superficial," Yoon, co-chairman of the G20 this year, told reporters.

The United States and the European Union have said China should allow the yuan to appreciate to ease imbalances in the global economy.

Last year, the G20 agreed to a framework for rebalancing growth, but implementing it was likely to prove difficult -- particularly when countries are asked to adopt policies that may hurt their domestic growth.

Regulation of the financial sector would be the main topic for the meeting, but there was unlikely to be an agreement on the issue, Yoon said two days before leaving for Washington.

"It will take considerable time to get a result," he said.

"Due to sharp differences in the interests of each country, it will be difficult to conclude in April," South Korean Deputy Finance Minister Shin Je-yoon said.

Despite bold pledges to rein in risky behavior by banks and ensure taxpayers never again have to foot the bill for salvaging companies on the brink of collapse, domestic regulatory reform efforts are bogged down in legislative mud, and there is growing concern that cross-border cooperation will be tough to secure. [ID:nN1698563]

The United States and other countries have pushed for a bank levy to cover the cost, while Canada has been among the most vocal opponents of the idea.

On energy subsidies, Shin said he cautiously expected the G20 to agree on a timeframe but not an agreement on details.

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