Australia to benefit from G20's agreement on currency control: Treasurer

13:22, October 25, 2010      

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Australia will benefit from an agreement among G20 finance ministers to seek greater flexibility in currency markets, Treasurer Wayne Swan told parliament on Monday.

Swan spent the weekend in the South Korean city of Gyeongju, where ministers prepared for the G20 leaders' summit in Seoul of South Korea next month.

The weekend meeting produced agreement on reform to the International Monetary Fund's (IMF's) governance structures, to give more weight to developing nations, and on refraining from devaluing currencies, as part of a framework for strong and balanced growth.

The agreement came amid fears that nations were on the verge of a so-called currency war, in which they would devalue currencies to gain an export advantage over competitors.

"In particular, (we) agreed that we should be moving towards more market determined exchange rates, and that is a very important outcome for Australia,"Swan told Parliament, adding "we do not want to see the competitive devaluation on currencies that we have seen in recent months."

The Australian dollar reached parity with the U.S. currency in mid-October, and has since settled above 99 U.S. cents.

Such stronger local unit has pushed up the price of exports, which has occurred as the governments of other developed nations have artificially devalued their currencies to help domestic industries.

Source: Xinhua


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