Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

G-20: We'll avoid currency war

By Aaron Smith, staff writer


NEW YORK (CNNMoney.com) -- Leaders of the G-20 nations on Friday agreed to "refrain" from all-out currency warfare, but failed to meet high expectations that they would come up with a plan to stabilize the world economy.

Completing a two-day summit in South Korea, the G-20 nations released their so-called Seoul Action Plan, a communiqué that outlines a wide range of macroeconomic policies.

The general goal, as stated at the outset of the world financial crisis in 2008, is to try and prevent the world from sliding into another economic slump.

"The actions agreed to today will help to further strengthen the global economy, accelerate job creation, ensure more stable financial markets, narrow the development gap and promote broadly shared growth beyond crisis," read the G-20 plan.

One of the many pledges is to "refrain from competitive devaluation of currencies." This is a direct reference to one of the more contentious subjects in international financial relations: the currency dispute between the United States and China.

"Advanced economies, including those with reserve currencies, will be vigilant against excess volatility and disorderly movements in exchange rates," read the G-20 plan.

U.S. critics believe that China is keeping its currency, the yuan, artificially low by hoarding reserves, keeping its exports cheap and undercutting international competitors.

U.S. Treasury Secretary Tim Geithner has tried to sort out the problem and defend against claims that the United States is deliberately weakening the dollar.

However, the conclusion of the G-20 summit failed to convince experts that any real progress had been made, particularly in the U.S-China currency dispute.

"The failure to agree to any definitive action should come as no surprise to the currency markets," said Mark O'Sullivan, director of dealings at Currencies Direct, a London-based currency transfer services company. "The vague set of indicative guidelines issued in the final communiqué, really once again underlines how little effect the G-20 can have on the current problems the global economy faces."

The G-20 said it will hold its next summit in France in 2011, followed by the 2012 summit in Mexico. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.02%3.99%
15 yr fixed3.16%3.18%
5/1 ARM3.31%3.40%
30 yr refi4.06%4.01%
15 yr refi3.18%3.20%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 19,756.85 142.04 0.72%
Nasdaq 5,444.50 27.14 0.50%
S&P 500 2,259.53 13.34 0.59%
Treasuries 2.46 0.08 3.23%
Data as of 12:19am ET
Company Price Change % Change
Bank of America Corp... 23.09 0.14 0.61%
Ford Motor Co 13.17 0.14 1.07%
Chesapeake Energy Co... 7.72 0.12 1.58%
Twenty-First Century... 28.21 -0.43 -1.50%
Apple Inc 113.95 1.83 1.63%
Data as of Dec 9
Sponsors

Sections

Even Carl Icahn, one of President-elect Donald Trump's biggest cheerleaders on Wall Street, thinks the post-election exuberance in the stock market has gotten a bit out of hand. More

Republican leaders keep saying Obamacare is hurting the economy and killing jobs, but there's scant evidence for it. In fact, a number of studies show that the economy has been growing. More

Facebook admits it messed up more ad metrics than previously thought, potentially eroding its trust and relationship with marketers and publishers. More

The Los Angeles city attorney is suing four major retailers over claims that they deliberately inflated the original price on some items that misled customers into thinking they were getting a better deal. More