SOUTH AFRICA: G20 countries discuss global financial stability near Cape Town

Finance ministers and central bank governors from the 20 most industrialised and important emerging economies, the G20, prepare to start discussions on global financial stability near Cape Town on Saturday. Finance ministers and central bank governors from the world's largest economies gathered in Kleinmond in the southern Cape on Saturday (November 17) for a meeting of the so-called Group of 20 (G-20) countries. It is the first time the event - described by South Africa's Finance Minister Trevor Manuel as probably the most significant gathering of economic policy makers ever seen in South Africa - has been held on African soil. The G20 represents about two-thirds of the world's population and includes countries that account for 90 percent of total global economic output. All major central bank governors are due to attend, including U.S. Federal Reserve Chairman Ben Bernanke, European Central Bank President Jean-Claude Trichet and Zhou Xiaochuan, who is Governor of the People's Bank of China. The head of the World Bank, Robert Zoellick, and IMF chief Dominique Strauss-Kahn will also attend. Central bank Governor Tito Mboweni of South Africa, which chairs the meeting this year, has said the group will discuss the rebalancing of global currencies as the dollar weakens while Canada has said the dollar's fall will be the dominant theme. Ahead of the meeting, U.S. Treasury Secretary Henry Paulson said in Cape Town on Friday that Washington was following a strong dollar policy and indicated he expected the currency to rebound, emphasising the U.S. economy's long-term strength. The dollar has fallen 9 percent against a basket of major currencies to record lows in 2007, largely because of darkening prospects for U.S. economic growth during a sharp housing sector slowdown. Gloom over prospects for the dollar deepened last week when a top Chinese lawmaker, who has no real authority over financial matters, suggested a bigger role for the euro in its 1.43 trillion U.S. dollar hoard of foreign exchange reserves. A Chinese central banker also said the dollar is losing its global currency status. Officials from gulf states have signalled they could move away from the dollar peg towards a basket of currencies. Discussions were also likely to touch on China's currency, the yuan, amid renewed calls for Beijing to speed up its appreciation, and the impact of soaring commodity prices on emerging economies.

ITN Source | November 17, 2007

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