Currency devaluation and exit strategies for monetary easing are expected to top the agenda among financial policymakers at the upcoming G20 meeting of finance ministers and central bankers, Korean officials said Wednesday. The meeting is scheduled for Feb. 15-16 in Moscow.
Korea’s Finance Minister Bahk Jae-wan and Bank of Korea Governor Kim Choong-soo will be attending the two-day meeting to share their views, especially on the global foreign exchange market, which has been prone to increased volatility due to Japan’s weak yen policy.
Japan’s aggressive monetary easing aimed at reviving its economy through a weak yen and inflation has drawn criticism and uneasiness from advanced economies such as Germany, the U.S. and Korea.
Korea, as well as the European Union, has been keen on monitoring the currency from strengthening while worldwide economies aim to overcome the slowdown through exports.
The pace of the Japanese yen depreciation has been gaining as Lael Brainard, undersecretary for international affairs at the U.S. Department of Treasury, recently supported Japan’s stimulus plans.
However, Brainard, who will be participating the G20 meeting, added that countries should commit to “market-determined exchange rates and refrain from competitive devaluation.”
The G20 meeting this week should focus on policy coordination to boost demand amid weak global growth, she said.
Global central bankers are also expected to discuss ways to exit near-zero monetary policies that boosted money supply in the global markets as the U.S. and eurozone show signs of economic stability.
The U.S. and Europe’s monetary easing also drove capital to be invested in safe-haven U.S. treasury bonds, as well as in emerging markets’ higher-yielding assets.
However, those funds are being shifted to riskier assets such as stocks as the U.S. economy improves.
The Bank of Korea said the G20 will also discuss issues such as global financial regulation reforms and commodity market stabilization.
The Group of 20 finance ministers and central bankers are expected to release its communique on Saturday.
By Park Hyong-ki and news reports
(
hkp@heraldcorp.com)
