Russia frets global economy ‘unstable’

SEOUL - Russia is concerned that the global economy is “unstable and unbalanced” and some countries are weakening their currencies to stimulate growth, a source with the country’s delegation to the G20 Summit said on Thursday.

By (Reuters)

Published: Thu 11 Nov 2010, 1:13 PM

Last updated: Mon 6 Apr 2015, 11:24 AM

“We are especially worried by attempts by a number of countries to take unilateral decisions to weaken their currencies in order to stimulate growth without agreement with other partners,” the source said.

“We believe that such steps lead to nervousness among market players and volatility of main currencies, prompting fears of global ‘currency wars’.”

World leaders gathered in Seoul for a two-day summit hoping to move beyond broad promises of economic cooperation, but days of rancorous debate appear to have undone much of the G20 unity forged in the throes of a global crisis two years ago.

U.S.President Barack Obama has urged his peers to put aside differences and follow through on previous agreements to even out imbalances between cash-rich exporting nations and debt-burdened importers.

But an idea floated by the United States earlier for numerical targets to be set for trade imbalances appears to have been taken off the table after drawing little support.

“Russia does not support the US proposal to introduce limits on the current account’s deficit or surplus of 4 per cent of GDP in the short or medium term,” the Russia source said.

“There is risk that lack of clear, solid and all-encompassing plans of fiscal consolidation by the countries issuing reserve currencies can contribute to uncertainty and weaken confidence in financial markets.”

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