G20 will vow to avoid forex undervaluation: draft statement

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GYEONGJU, Oct 21, 2010 (AFP) - The Group of 20 nations will vow at a weekend meeting to "refrain from competitive undervaluation" of their currencies, according to an early draft of a statement.

The draft obtained by Dow Jones Newswires suggests that finance ministers of the world's top economies may take a clear stand against a feared global currency war.

The G20 will "move towards (a) more market-determined exchange-rate system", the draft said, reflecting an often-used US expression meant to discourage countries from intervening in currency markets.

But it also said the group would minimise "adverse effects of excess volatility and disorderly movements in exchange rates" -- apparently reflecting concerns of Asian and other export-reliant nations about rapid rises in their currencies.

The statement could change following the meeting Friday and Saturday of ministers and central bank governors in the southeastern South Korean city of Gyeongju.

But a G20 official with the host nation said a reference to currencies would likely remain and the draft wording was seen as neutral.

The United States and European Union accuse China of keeping its yuan undervalued to benefit exporters, while Beijing says Washington's loose monetary policy is irresponsible.

China notes that expectations of US "quantitative easing" -- a move to pump more dollars into the market -- are causing emerging markets to be swamped with destabilising capital inflows as investors chase higher yields.

Taiwan's central bank governor Perng Fai-nan has warned that nearly 12 billion US dollars of suspected "hot money" has flowed into the island in a bet that the local currency will continue to rise, an aide said Thursday.

US Treasury Secretary Timothy Geithner said he would push his G20 counterparts to "rebalance" the global economy away from US consumption, and push "fair" currency rules.

He told Thursday's Wall Street Journal the meeting was a chance to push "our partners to put a little more flesh on the skeleton of the rebalancing commitment.

"The rest of the world wants us to save more -- and that means less US demand for the rest of the world. Demand is going to have to come from other sources."

Brazilian President Luiz Inacio Lula da Silva urged the group to reach a solution to currency disputes.

"The whole world is seeing there is a currency war and we need to discuss this in the G20 and find a definitive solution to it," he said Wednesday in Brasilia.

Australia wants to see all countries including China move to market-based exchange rates, Treasurer Wayne Swan said Wednesday.

Swan said G20 ministers are unlikely to decide any "definitive outcomes" on the currency battles or on broader structural issues threatening sustainable global growth, but would prepare the ground for the November 11-12 summit in Seoul.

The yuan, he noted, "is not solely responsible for imbalances in the global economy" .

The International Monetary Fund, in its regional outlook, urged Asia to work to rebalance growth.

"With external demand from advanced economies unlikely to return to pre-crisis trends in the foreseeable future, Asia will need stronger domestic demand to maintain robust growth," it said.

Several top officials including South Korean President Lee Myung-Bak have warned that failure to settle currency disputes could fuel protectionism and damage world economic recovery.

"Our cooperation is essential," the draft G20 statement said, to maintain a global recovery that is "moving ahead, albeit in a fragile and uneven way.

"Recent financial market strains have receded, in part due to our timely and concerted policy efforts. However, many downside risks remain."

G20 members vow to play their part "in sustaining ongoing growth and reducing global imbalances in a collaborative way", the draft said.

The group will "work to manage more effectively rapid and volatile capital inflows into emerging countries", it said, also pledging structural and regulatory reforms.

lim/sm/dan

© Copyright AFP 2010.

http://www.zawya.com/story.cfm/sidANA20101021T071407ZAPW24/G20%20will%20vow%20to%20avoid%20forex%20undervaluation:%20draft%20statement

[jfv]

US Treasury Secretary Timothy Geithner said he would push his G20 counterparts to "rebalance" the global economy away from US consumption, and push "fair" currency rules.

Read more:

I LIKE THE WAY THIS ARTICLE READS!!!

GOOOORVVVVVV!!!!!!!!!!

JANINE

[pourit]

ME TOO......POURITFORWARD

[Chief V]

Here we were buying Vietnamese Dong and the "NEW" Taiwanese Dollar is going up!..lol

The New Taiwan Dollar is the currency in Taiwan (TW, TWN). The New Taiwan Dollar is also known as the Taiwanese Dollar. The symbol for TWD can be written NT$, NTD, and NT. The New Taiwan Dollar is divided into 100 cents. The exchange rate for the New Taiwan Dollar was last updated on October 21, 2010 from Yahoo Finance. The TWD conversion factor has 5 significant digits.

The United States Dollar is the currency in American Samoa (AS, ASM), British Virgin Islands (VG, VGB, BVI), El Salvador (SV, SLV), Guam (GU, GUM), Marshall Islands (MH, MHL), Micronesia (Federated States of Micronesia, FM, FSM), Northern Mariana Islands (MP, MNP), Palau (PW, PLW), Puerto Rico (PR, PRI), United States (United States of America, US, USA), Turks and Caicos Islands (TC, TCA), Virgin Islands (VI, VIR), Timor-Leste, Ecuador (EC, ECU), Johnston Island, Midway Islands, and Wake Island. The United States Dollar is also known as the American Dollar, and the US Dollar. The symbol for USD can be written $. The United States Dollar is divided into 100 cents. The exchange rate for the United States Dollar was last updated on October 21, 2010 from The International Monetary Fund. The USD conversion factor has 6 significant digits.

http://coinmill.com/TWD_USD.html

We sure have allot of money in Foreign Island accounts....lol I wonder if the IRS knows about this???

[doc9574]

LOL Chief and they are probably taxing them as well, maybe we ought a just make our own currency to heck with the rest of the world