RIO DE JANEIRO: Finance ministers and central bank chiefs from the Group of 20 advanced and emerging economies reaffirmed Friday their past agreement warning against excessive foreign exchange market fluctuations.
At their two-day meeting in Rio de Janeiro through the day, the G-20 finance and central bank chiefs adopted a joint statement, after failing to do so in the past two meetings.
“We reaffirm our April 2021 exchange rate commitment,” the G-20 officials said in the statement. The 2021 statement said, among other things, that the G-20 economies would “consult closely on foreign exchange market developments” and that “excessive volatility or disorderly movements in exchange rates can have adverse implications for economic and financial stability.”
“We firmly conveyed Japan’s position on international challenges (in the latest G-20 talks), and Japan’s views were reflected in the outcomes of the meeting,” Japanese Finance SUZUKI Minister Shunichi told a press conference after the end of the Rio de Janeiro talks. “It was an important achievement,” Suzuki said of the G-20 officials’ reconfirmation of the agreement on the foreign exchange market.
His comments came after the yen’s recent sharp depreciation has come to a pause partly on the back of Japanese authorities’ yen-buying currency market interventions. Still, the yen remains under strong selling pressure due in part to the wide gap between U.S. and Japanese interest rates.
On international taxation, a focal issue in the G-20 meeting, the joint statement said that “we welcome the progress” made in the work toward the implementation of digital service taxes, which are apparently intended to target information technology giants.
But the document failed to show a target for the timing of signing for a multilateral treaty needed for putting such a taxation framework into action, saying only that the treaty should be “finalized and opened for signing as soon as possible.”
As to taxation on the super-rich, pushed by Brazil, this year’s G-20 chair, the joint statement said, “We continue to work together toward a fairer, more stable and efficient international tax system fit for the 21st century.”
The finance and central bank chiefs separately adopted a declaration on international tax cooperation. The declaration stressed the importance of progressive taxation as a key tool to “reduce domestic inequalities.”
The Rio de Janeiro joint statement cited “the increasing likelihood of a soft landing of the global economy.”
Meanwhile, it pointed to downside risks such as “wars and escalating conflicts,” “economic fragmentation” and “more-persistent-than-expected inflation leading to higher-for-longer interest rates.”
Amid strong concerns over growing trade frictions due to the confrontation between China and the camp of the United States and European nations, the statement said, “We commit to resist protectionism and encourage concerted efforts to support a rules-based, nondiscriminatory, fair, open, inclusive, equitable, sustainable and transparent multilateral trading system.”
This time, Brazil aimed to adopt a joint statement including challenges facing developing and emerging economies while avoiding discussions on sensitive issues related to geopolitical risks. “Some members…expressed their views on Russia and Ukraine, and the situation in Gaza,” a chair’s statement said, indicating a deep divide among G-20 members.
JIJI Press