G20 leaders agree deal to avoid 'currency wars'

G20 leaders agree deal to avoid 'currency wars'

2010-11-12 21:12:32 GMT+7 (ICT)

SEOUL, SOUTH KOREA (BNO NEWS) -- G20 leaders on Friday agreed to a series of guidelines that are aimed at avoiding "currency wars."

"The actions agreed to today will help to further strengthen the global economy, accelerate job creation, ensure more stable financial markets, narrow the development gap and promote broadly shared growth beyond crisis," the G20 Seoul Action Plan stated.

No details were discussed regarding the "indicative guidelines" that will be measuring economic imbalances between the nations, but the agreement fell short of President Barack Obama's proposed 4 percent limit on on national trade deficits and surpluses due to a block by China and Germany.

G20 leaders decided to move toward market-determined exchange rates and avoid competitive devaluations of currencies, although the leaders agreed to further discuss the details next year.

The plan stated that "advanced economies, including those with reserve currencies, will be vigilant against excess volatility and disorderly movements in exchange rates."

However, with the U.S.' constant complain of an undervalued Chinese yuan, Obama went on to say that the "work that we do here is not always going to seem dramatic. It's not always going to be immediately world-changing."

"But step by step what we're doing is building stronger international mechanisms and institutions that will help stabilize the economy, ensure economic growth and reduce some tensions," Obama added, underlining that exchange rates "must reflect economic realities."

"By acting together we can maximize world growth and we can cut world unemployment. This is not some obscure economic issue - in the end, it is about jobs," British Prime Minister David Cameron stated.

-- © BNO News All rights reserved 2010-11-12