The Group of Seven (G7) top industrialized nations have committed themselves to free-floating foreign currency exchange rates. They've called for monetary policies not to be directed at devaluing national currencies.
The G7 powers reaffirmed their commitment to market determined exchange rates and pledged to consult closely with regard to actions in foreign exchange markets, a statement released on Tuesday said.
The group - which includes leading industrialized nations Britain, the United States, France, Germany, Japan, Canada, and Italy - expressed concern that excessive volatility in foreign exchange markets could have adverse implications for economic and financial stability.
The statement comes amid global fears of a rise in so-called competitive currency devaluations, frequently described as "currency war." Some countries have started to print money under attempts to drive down the value of their currency, thus gaining a competitive advantage for their exports in global markets.
Notably, Japan's new Prime Minister Shinzo Abe was recently criticized for pressing his country's central bank to aggressively expand monetary policy, which has seen the yen weaken sharply against other global currencies.
However, Japanese Finance Minister Taro Aso said the G7 recognized that Tokyo's policy was not aimed at affecting foreign exchange markets but rather seen as an attempt to beat deflation.
At their meeting in London, the G7 called on the larger Group of 20 (G20) nations, which also includes emerging economies, to ensure that growth strategies in the world's main economies are compatible. The G20 is to meet in Moscow on Friday, with currency policy set to be one of the main issues on the agenda.
uhe/pfd (AFP, Reuters, dpa)