SOUTH AFRICA: Finance ministers and central bank governors from the 20 most industrialised and important emerging economies, the G20, wrap up discussions on global financial stability

Finance ministers and central bank governors from the 20 most industrialised and important emerging economies, the G20, wrap up discussions on global financial stability near Cape Town. Finance chiefs from the Group of 20 economic powers agreed on Sunday (November 18) too much volatility and erratic movements in currencies were unwelcome, but stopped short of denouncing recent dollar weakness. Finance ministers and central bank governors from the G20 were wrapping up their two-day meeting with the main focus being the currency imbalances and the risks to global growth from credit woes stemming from the U.S. subprime mortgage crisis. The dollar's fall to record lows against a basket of currencies as credit conditions have deteriorated in global financial markets since August has been a factor driving up the price of key commodities, particularly oil, fuelling inflation and putting world economic growth at risk. French Economy Minister Christine Lagarde said on Sunday the G20 countries did not want to see too much currency volatility and erratic movements, but laid blame on no particular currency. "We all concurred that the currency situation is one that needs a joint approach, that needs a concerted approach and we clearly we don't point the finger at anyone and we want to operate by consensus," Lagarde told reporters. Urging reform of global financing bodies, South African President Thabo Mbeki told key finance ministers that global engagement must stop putting minority interests first. "Clearly, for this global community equally to enjoy prosperity, we do need this new model of engagement which actively seeks to break deadlocks, some of which are age-old, which frustrate global economic and social development and the eradication of poverty," he told G20 finance ministers and central bank heads. The president of Africa's largest economy was addressing the second and last day of a meeting of representatives from the world's 20 largest economies in Kleinmond, near Cape Town. South Africa's Finance Minister Trevor Manuel later said at a news conference that in an environment of floating currencies, there would be all kinds of trends. "If you ask for the little bit of experience I have from my own country, there frequently are overshoots in exchange rates," Manuel added. G20 members had also discussed a U.S. proposal to develop a "best practices" code for sovereign wealth funds that have ballooned in recent years. Countries including China, Russia and Saudi Arabia are estimated to control more than 2 trillion U.S. dollars between them as they have racked up huge trade and oil revenues, stoking fears that the funds pose risks to financial market stability and fuelling worries about investment transparency.

ITN Source | November 19, 2007

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