ST. PETERSBURG, Russia, Sept. 6 (UPI) -- The United States has sought to clarify its monetary policy as the impact of quantitative easing by some advanced economies raises concerns in emerging ones.
The issue will be discussed at the G20 summit in Russia by countries such as India, where the exchange value of the rupee has fallen sharply lately. The currency's collapse has partly been blamed on concerns the United States, with its economy rebounding, may soon phase out its massive monetary easing. Such a step would cut off a source of cheap money, some of which had been finding its way into emerging markets such as India and Indonesia. Currencies of Indonesia, Brazil and Turkey also have fallen sharply.
Japan, the world's third-largest economy after the United States and China, also has put into effect since April a massive monetary easing policy designed to pull the country out of 15 years of deflation and to boost exports through a lower yen.
At a media briefing at the venue of the G20 meeting in St. Petersburg, deputy U.S. national security adviser Ben Rhodes said the United States has taken various steps, including monetary polices, to recover from "a grave economic crisis," and that as the economy improved, there have been adjustments in policies.
He reminded, however, neither the U.S. government nor its president sets the policy of the Federal Reserve, the country's central bank.
He said there are different things each country, including emerging economies, can do within the G20 framework to invest in economic growth.
"And what we've consistently said is even as we deal with long-term fiscal imbalances, countries can take different types of steps to promote investment or to provide their own investment in growth and job creation," Rhodes said.
He said the United States also has said "repeatedly" that emerging economies will need to "look within their own borders for demand," and that there are steps through which emerging economies "can find growth not just from consumers in the United States, but from within their borders."
Referring to the criticism of the U.S. quantitative easing, Rhodes said "what has been demonstrated is we've pursued a pro-growth policy, and we believe that that ultimately is good for the global economy, because when the U.S. economy is growing it helps provide momentum more broadly." However, he stressed "we cannot be a substitute for demand that is generated in other countries."
Indian Prime Minister Manmohan Singh, attending the summit, has called for an "orderly exit" from unconventional monetary policies pursued by the developed world to avoid "damaging" growth prospects of the developing world.
Indian media reports said besides India, other emerging economies, including the BRICS bloc, also are concerned about current market and current volatility. The BRICS bloc includes Brazil, Russia, India, China and South Africa.
Singh stressed the importance of G20 in promoting policy coordination among major economies to provide for a broad-based and sustained global economic recovery and growth.
Singh reminded while there are encouraging signs of growth in the industrialized countries, there also is a slowdown in emerging economies due to the adverse impact of significant capital outflow.
A senior Indian official traveling with Singh said there should be a measure of "predictability" on the quantitative easing by the U.S. Federal Reserve to prevent a spillover from disrupting emerging economies, the Press Trust of India reported. India's problems, however, also have been blamed on a decade-low growth, high fiscal and current account deficits.
Chinese President Xi Jinping said in order for the G20 members to build a closer partnership to shore up the world economy, the world's major economies should first adopt a responsible macroeconomic policy and oppose all forms of trade protectionism, the official Xinhua News Agency reported.
Xi also said all major economic entities have a minimum duty of keeping their own house in order, and need to improve communication and coordination on macroeconomic policy. He said while China's economic fundamentals are sound, it has to advance structural reforms to solve the problems hindering its long-term economic development.
The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, Britain, the United States and the European Union.