India to take up currency devaluation issue at G20

The meet will focus on the recent global economic developments, challenges and collective measures to address them

Ahead of the meeting of G20 finance ministers and central bank governors in Turkey, India on Thursday said competitive devaluation of currency is a major threat to stability in the global economy.

"The recent devaluation of major currencies followed by currency depreciations in a large number of Asian emerging markets raises the risk of competitive devaluations.

"Competitive currency devaluations, at a time when global demand is sluggish, is a major threat to stability in the global economy," an official release said as Finance Minister Arun Jaitley left for Ankara.

He would participate in a two-day conference of G20 finance ministers and central bank governors, who will take stock of the global economic situation and review the member nations' growth strategies.

G20 ministers and governors in Ankara, on September 4-5, will exchange views on the recent global economic developments, challenges and collective measures to address them as well.

Reserve Bank of India Governor Raghuram Rajan will also participate in the meet.

"The attempt in Ankara would be to analyse the situation and consider collaborative measures like developing the global safety nets to protect countries from negative spill-overs arising from domestic actions," the release said.

The finance minister will also hold meetings with his counterparts from G20 countries on the sidelines of the meet.

Other members of the grouping include Argentina, Brazil, China, France, Germany, Italy, Japan, Russia, South Africa, Turkey, the UK, the US and the European Union.

Jaitley will also participate in the joint meeting of G-20 Finance and Labour Ministers as well as in the First Meeting of the Governing Council of BRICS Contingent Reserve Arrangement (CRA).

"The main purpose of these meetings is to review ongoing global economic developments, growth prospects, investment and infrastructure, international financial architecture and international tax issues among others," the release said.

The recent devaluation of Chinese currency Yuan has triggered a global financial turmoil hurting stock and currency markets worldwide.

The ministers and the governors will also review the progress in monitoring and adjustment of G20 growth strategies and evaluate the way forward for G20 investment strategies.

They would also discuss the international financial architecture issues, financial regulation, international tax agenda and climate finance issues.

Following the discussions, a communique of the Ankara Meeting will be issued.

Ahead of the ministerial meeting, G20 labour ministers are meeting in Ankara tomorrow to discuss growth and employment issues.

India is represented at that meeting by Labour Minister Bandaru Dattatreya. The meet will discuss strategies to deliver more and better jobs and policies to reduce inequalities to support inclusive growth.

"The joint meeting of G-20 Finance and Labour ministers will address issues of employment and growth, inequalities, declining ratio of labour income in GDP, youth unemployment and skilled labour mobility," the release said.

Finance ministers of G-20 countries will also review the progress on the G-20/OECD High Level Principles on SME financing and the establishment of the private sector-led World SME Forum, a new initiative to serve as a global body to drive the contributions of SMEs to growth and employment, it said.

"G-20 finance ministers will also deliberate on country specific investment strategies that identify measures to improve and promote investment in infrastructure," it added.

The BRICS Contingent Reserve Arrangement (CRA) has been conceived as an additional safety net by the BRICS nations to meet the short-term liquidity needs that may arise in face of volatile capital flows. The total corpus of CRA is $100 bn.

Jaitley will also attend the First Meeting of the Governing Council in Turkey.

"Finance minister will leave for home on September 6 and will reach national capital early morning on September 7," the release said.