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Closed-door G20 focuses on foreign exchange, stability

By Staff
Google Oneindia News

KLEINMOND, South Africa, Nov 17 (Reuters) Finance ministers and central bank governors from the G20 economic powers met amid tight security on Saturday, locked in talks on global financial stability and currency moves.

Hosts South Africa kept a tight rein on journalists, blocking access to the venue, a remote luxury hotel surrounded by golf fairways near Kleinmond, a seaside village about 100 km southeast of Cape Town.

The group of 20 mostly industrialised and emerging economies were to release a communique at 1130 GMT on Sunday detailing resolutions likely to focus on foreign exchange imbalances -- including the dollar and China's yuan -- and the global credit crunch stemming from the U.S. subprime mortgage crisis.

Canadian central bank Governor David Dodge told reporters in a conference call that discussions had made it clear the downside risks to world growth had increased.

''It's quite clear that the global financial turbulence that we were experiencing then (in October) is now going to be more prolonged and the volatility is likely to continue to be higher for longer, certainly longer than we anticipated when we met at the IMF last month,'' he said.

Soaring commodity prices, including oil, were also expected to have been key issues.

British Finance Minister Alistair Darling was to urge Saudi Arabia and other OPEC oil producers to pump more oil to help reassure markets, treasury officials said, as prices climb to close to 0 a barrel.

''The international community has acted to improve the functioning of the international oil markets but prices remain high and volatile. There is much more we can do,'' according to a text of his speech released in Britain ahead of the summit.

Emerging economies were also expected to press for faster reform of the International Monetary Fund and World Bank, to give them greater say and voting power.

Some central bank governors had, before the meeting, pointed to dollar weakness and the inflexible yuan as the main issues for discussion.

Gulf states have raised concerns about the impact of a tumbling greenback on their dollar-pegged currencies and economies, while the United States and Europe, in particular, have called for more rapid appreciation of China's yuan.


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