Group of Seven seeks to allay fears of a “currency war”

Group of Seven seeks to allay fears of a “currency war”

Published in: 7:03 am, February 13, 2013 by ipa

BAGHDAD (Iba) .. Group of Seven nations sought Tuesday to calm fears of a “currency war” fueled by the measures taken by Japan recently, and reaffirmed it will leave the market free to determine the exchange rate, saying at the same time that “excessive volatility” are having a negative impact.

The club of rich nations decided to publish an official statement a few days before a meeting in Moscow on Friday and Saturday and the Group of Twenty finance ministers – which includes rich countries and emerging – will focus its discussions on the concerns of the race to reduce the currency to strengthen competitiveness.

He finance ministers and central bank governors of the Group of Seven, which includes Germany, Canada and the United States, France, Britain, Italy, Japan, the new “commitment to a long time ago at prices determined exchange market”, as confirmed in a statement published by Britain, which holds the presidency of the Group of Seven this year, that their countries will not set itself “a target for the exchange rate.”

But they reiterated that “excessive volatility and inconsistent movements in exchange rates can result in negative repercussions on economic and financial stability.”

They said “We will continue our consultations closely on exchange rates and cooperate appropriately” stressing that “our financial policies and budgetary was and will remain our national goals-oriented national and using our tools.”

Have grown fears of “currency war” between the great powers after the central bank’s decision to Japan in January / January softening monetary policy under the pressure of the new government in order to fight the economic downturn and rising yen negative impact on exports.

Following publication of a Group of Seven, which made no mention of the Japanese measures, the first results appeared consistently weaker yen and euro’s rise against the U.S. dollar.

But Finance Minister Taro Aso welcomed the tone adopted by the text, stressing “that different countries have realized that fiscal policy adopted by Japan is not currency manipulation.”

But the Japanese currency recorded after a new leap because press reports indicated according to an unnamed source illustrated that the Japanese central bank’s policy concern within the Group of Seven.

And raises resume rising euro serious concern to France, which fears that undermines efforts to enhance their competitiveness and would like to open a discussion in this regard within the euro group deliberately its part, the United States to pump heavily currencies resulting in a decline in the value of the greenback against the euro.

But Berlin and the European Central Bank reject the idea of raising the value of the single currency.

The French president Francois Hollande that “we need to work in order not to use the currency rates for commercial purposes.”

Madrid entered the European Central Bank President Mario Draghi in trying to turn the debate to allay fears. He said in this regard, “I think that the words + currency war exaggerated to a great extent. Will not see something like this. ”

Analysts believe that attempts to calm this may stop. Analysts said the German Central Bank “All that is related to” currency war “has exaggerated apparently interpreted” by the market and the “hysteria may continue until the twentieth meeting of the Group.”