Reuters: Regulatory News: UPDATE 1-ECB's Constancio expects G20 floating FX commitment

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-ECB's Constancio expects G20 floating FX commitment Feb 12th 2013, 09:56 Tue Feb 12, 2013 4:56am EST * ECB's Constancio: major economies must respect floating FX rate * Any potential FX intervention would have to be coordinated * FX should not be target of policies, but determined at markets By Ritsuko Ando and Sakari Suoninen HELSINKI, Feb 12 (Reuters) - The Group of 20 industrialised nations should reaffirm their commitment to floating exchange rates at their upcoming Moscow meeting, European Central Bank Vice President Vitor Constancio said on Tuesday. The G20 accounts for 90 percent of the world's economy and two-thirds of its population. Russia currently heads the group, which has been split between borrowers seeking to grow out of a debt trap and surplus countries keener on austerity. More recently, attention has focused on foreign exchange rates, with talk of currency wars restarting as the euro gains ground and some accuse Japan of unfairly weakening its currency. Constancio said the G20 was likely to state that agreed rules of market-determined exchange rates would be abided by. Sources told Reuters on Tuesday that the Group of Seven big industrialised nations will make a statement on exchange rates at 1000 GMT, reacting to weeks of flaring rhetoric about a currency war. "We of course want that everyone else respects those principles," Constancio told reporters on the sidelines of a bank regulation conference in Helsinki. "I expect that these principles will be reaffirmed, pure and simple," he said when asked what he saw coming out of the G20 meeting this weekend in Russia. Turning specifically to foreign exchange interventions, he said no country should use such a weapon unilaterally but - speaking hypothetically - could do so when agreed upon by the largest economies. "Those interventions would have to be coordinated with the other major floating currencies. This is just to underline what are the principles that have been agreed upon internationally," Constancio said. G20 sources and economists say officials are likely to tone down their rhetoric over competitive currency devaluations, as also suggested by Constancio. Russia's central bank has accused Japan's new government of protectionist monetary policy. Competitive devaluations could become another pothole on the road to economic recovery, as growth-hungry countries seek to give their exporters an edge by talking down their currencies or actively pushing them lower via bold monetary easing. After fierce criticism of Japan in some quarters, Finance Minister Taro Aso sought to restore calm on Friday by saying the recent slide in the yen had gone too far. Constancio also said there was no currency war going on currently and that any notion of one had to be avoided. Floating exchange rates, set by markets rather than by governments, should be respected, he said. "Whatever are the policies pursued by countries that have major currencies with the intention of attaining domestic targets and exchange rates are not the targets," he said. Constancio also said he expected ECB March staff growth and inflation forecasts to be close to the December ones. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions