G20 Summit in Sydney; focus on interest rates

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Sydney, Australia, February 20th, 2014.- The Sydney G20 Finance Ministers and Central Bank Governors meeting will be held over the weekend of 22-23 February 2014.

 

There will be around 2,000 people attending the Sydney G20 Finance Ministers and Central Bank Governors meeting. This includes Finance Ministers and Central Bank Governors from all G20 nations as well as their delegations.

 

Representatives from international organisations such as the International Monetary Fund and the World Bank will also be attending, as well as the G20 workforce including staff from Comcar and Treasury.

 

The International Monetary Fund says it is worried about extremely low inflation in Europe and ongoing volatility in emerging economic powers such as Indonesia, Brazil and South Africa.

 

Representatives from India, Brazil and Turkey in particular accuse the US Federal Reserve, under the leadership of new head Janet Yellen, of having severely handicapped their economies by backing away from the crisis driven policies it has pursued in recent years. By reducing the number of US sovereign bonds it purchases, the Fed has triggered a rise in US interest rates, with the consequence that a flood of investors are now returning to the dollar from emerging economies.

 

To halt the decline of their currencies, India and Turkey were recently forced to raise their own interest rates, a move which, while propping up the exchange rate, also puts the brakes on economic growth. As such, they and similar countries want to use the meeting in Sydney to establish a common approach with the industrialized economies, particularly with the US. They want the developed world to pay closer attention to economies in Asia and Latin America.

 

Emerging economies versus Europe and the US, just like at the beginning of the economic crisis. Back then, though, China, India and other emerging economies were negotiating from a position of strength. Pointing to their own strong growth rates, they demanded that the Americans and Europeans — who they not illogically saw as having caused the crisis — do more to prevent a collapse of the global economy. Now, though, with growth in emerging economies having slowed, roles have been reversed.

 

The Sydney meeting of finance ministers and central bankers comes ahead of the G20 Leaders’ Summit in Brisbane in November which Australia will chair.

 

Mexican Business Web via SBSDer Spiegel Online and G20 Australia 2014

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