Threat of currency wars low, financial G20 will not pay them much heed - OECD chief

The threat of 'currency wars' around the world is now lower than two or three years ago, and the financial G20 will not be paying too much attention to it, General Secretary of the Organization for Economic Cooperation and Development (OECD) Angel Gurria said during a Friday briefing in the context of a meeting of G20 finance ministers and central bank managers in Moscow.

The situation now, Gurria said, is such that several countries are making use of the forex-monetary and budget policy measures they have at their disposal to drive growth or, at least, put the brakes to economic downturn. Gurria said that negative or zero growth is observed in Germany, Italy, Spain, Britain, France, the United States, and Japan.

He said he does not think it necessary to continue to fight in battles that are already over. He said the need now is to look to the future, to think about increasing productivity, about competitiveness.

Gurria said he disagrees with those that speak of the existence now of currency wars.

For more than ten years now, Japan has had deflation, and it would be good if the situation turned around and economic growth began.

The Japanese have a package of additional stimulative measures, they are weakening monetary-lending policy, he said. The yen is weakening as a result of, but not because of, their manipulation of the national currency exchange rate, they use instruments of economic policy not only to weaken their own currency, but also to achieve growth, he said.

The financial G20 in Moscow is unlikely to put to much attention on the question of lowering the exchange rate of national currencies to stimulate the growth of local economies, Gurria said. He said he could assure his listeners of this, that ministers will not be talking, in any event not very long, they have other, more important problems.

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