China, US closer to G20 deal on trade imbalances: report

South Korean special police officers guard near the symbol of G20 at Gimpo Airport in Seoul, South Korea, Monday, Oct. 25, 2010. – AP Photo

BEIJING: China and the United States have reached the basis for an agreement at next month’s Group of 20 summit on setting targets to rein in global trade imbalances, a report said Wednesday.

The Financial Times quoted Li Daokui, an adviser to China’s central bank, saying G20 finance chiefs had made “good progress” towards a deal at their meeting in South Korea at the weekend.

“I was very encouraged by the G20 meeting,” Li told the newspaper in an interview. “It is now possible for the two governments (the US and China) and other governments to have a good understanding.”In a statement the G20 finance ministers agreed to “refrain from competitive devaluation of currencies” and aim for “more market-determined exchange rate systems”.

Group of 20 vows to avoid currency devaluations

European Economic and Monetary Affairs Commissioner Olli Rehn, center, speaks as European Central Bank President Jean-Claude Trichet, left, and Belgium’s Finance Minister Didier Reynders listen at their press conference following the G20 Finance Ministers and Central Bank Governors meeting at a hotel in Gyeongju, South Korea, Saturday, Oct. 23, 2010. – AP Photo

GYEONGJU: The world’s leading advanced and emerging countries vowed Saturday to avoid potentially debilitating currency devaluations, aiming to quell trade tensions that could threaten the global recovery.

The Group of 20 also said it will pursue policies to reduce trade and current account imbalances that threaten the economic recovery, and agreed to give developing nations more say at the International Monetary Fund, part of what it described as an ambitious set of proposals to reform IMF governance.

Bank of England chief issues ‘currency war’ warning

Thai bank employee counts bundles of Thai baht banknote at Krung Thai bank in Bangkok on October 18, 2010. – AFP Photo

LONDON: Bank of England governor Mervyn King has warned that tensions between countries over their respective exchange rates could degenerate into trade protectionism amid talk of a potential 'currency war'.

Ahead of a meeting of G20 finance ministers and central bankers in South Korea this weekend, King told British business leaders late on Tuesday that “the need to act in the collective interest has yet to be recognised”.