G20 communique headlines on Bloomberg:
- G20 pledges to avoid ‘persistent exchange-rate misalignment’
- BOJ policy actions aimed at stopping deflation
- Excess volatility in financial flows had adverse outcome
- Recovery in eurozone has yet to materialize
- G20 pledges not to target foreign exchange for competitive purposes
- Excess volatility in financial flows had adverse outcome
No reaction to the headlines as it’s the same old rhetoric from the G20. The main headline is a slight step further but ‘be mindful’ isn’t exactly a tape bomb.
Full text of the communique on FX:
We reiterate our commitments to move more rapidly toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments. We will refrain from competitive devaluation and will not target our exchange rates for competitive purposes, and we will resist all forms of protectionism and keep our markets open. We reiterate that excess volatility of financial flows and disorderly movements in exchange rates have adverse implications for economic and financial stability. Monetary policy should be directed toward domestic price stability and continuing to support economic recovery according to the respective mandates of central banks. We will be mindful of unintended negative side effects stemming from extended periods of monetary easing.
