G20 binds itself to curtail currency wars and strengthen IMF

Baku, Fineko/ The participants of the G20 summit ended yesterday pledged to curtail currency strife.

In the final statement the G20 leaders reaffirmed their decision to move more swiftly to a system of exchange rates, predefined by the market situation and increase the flexibility of currencies to make them to reflect the major non-market realities.

"We also agree to refrain from competitive devaluation of currencies," the statement says.

G20 believes that these steps should help the block countries cope with such threats as instability of capital flows and achieve further progress in reforming the foreign exchange rate and excessive accumulation of foreign reserves.

G20 has backed expansion of financial and technical arsenal of the IMF for global financial stability. The Fund will introduce a new tool to enhance financial stability - the so-called "pre-emptive liquidity lines” (PLL). These short-term lines of credit are designed to support countries that are characterized by robust fundamentals, but may suffer from "exogenous shocks", i.e. external economic factors not depending on them.

G20 undertakes to make the IMF to have sufficient financial resources in the future to fulfill its system role.

"As the need arose we are ready to mobilize in time additional resources for the IMF," the statement says.

G20 will also commission their finance ministers to work out for the next ministerial meeting the various methods to strengthen IMF lending capacity, including transfer of finances to the IMF on the bilateral basis, expansion of  SDR (IMF unit of account) capacities and voluntary investments in special structures under the auspices of the Fund.


05.11.2011 09:49

Tags: G20

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