Communique from G20 Finance Ministers and Central Bankers Unlikely to Be a Market Mover

April 17, 2015

The released two-page statement after meetings over two days in Washington contains little to excite market players.  Currency policy is boiled down to a single sentence: “We reaffirm our previous exchange rate commitments and will resist protectionism.”  The negotiations between the Greek government and its creditors is not addressed explicitly.  On the matter of global growth, the statement observes that such “remains moderate and is following divergent paths.”  A verdict that lower oil prices will have a positive overall effect is counter-balanced by a list of serious economic challengs: “volatility in exchange rates, prolonged low inflation, sustained internal and external imbalances, high public debt, and geopolitical tensions.” 

The statement identifies a need in many advanced economies for “accommodative monetary policies to anchor inflation expectations and support recovery.”  Macro-prudential measures and even selective capital controls where appropriate are recommended, too.  Country-specific investment-promoting strategies are being devised, and the ever-present call for structural reforms to improve potential growth rates are mentioned.  The U.S. congress is criticized for its failure to ratify the 2010 IMF Quota and Governance Reforms.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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