Lee: 'Currency war' ends temporarily

Nov. 12, 2010 at 7:19 AM
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SEOUL, Nov. 12 (UPI) -- The global "currency war" is temporarily over and Group of 20 leaders in Seoul agreed Friday to develop tools to achieve balance, South Korea's president said.

President Lee Myung-bak said leaders of developed and emerging economies endorsed a proposal to pursue more "market-determined" exchange-rate systems and develop "indicative guidelines" meant to assess trade imbalances for preventive and corrective actions, the South Korean news agency Yonhap reported.

"For now, in conclusion, (the world) is out of the so-called currency war," Lee said during a news conference summing up a two-day G20 summit. "Concrete guidelines will be made by the first half of next year and evaluated."

G20 leaders are expected to complete the agreement reached by the summit delegates in France next November, Lee said.

The United States blames its trade deficit partially on China's devaluation of its currency and pressed the G20 to address the matter by setting limits on account surpluses and deficits at 4 percent of the gross domestic product.

A statement from the summit said leaders "call on our Framework Working Group, with technical support from the IMF (International Monetary Fund) and other international organizations, to develop these indicative guidelines, with progress to be discussed by our finance ministers and Central Bank governors in the first half of 2011."

Participants agreed to develop a coordinated financial credit line approval system for times when multiple countries affected by a common disaster can seek loans simultaneously, Lee said.

"It is a big change in that the IMF is expanding its role to crisis prevention as well as crisis resolution," Lee said.

G20 leaders also discussed a new strategy to help poor nations develop, Lee said. He said South Korea's experience in rapid economic development would be a model.

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