Seoul: Group of 20 nations should not be too demanding in respect to policy coordination because that it has never been tried before, but eventually “some agreement” should be possible, India’s chief G-20 negotiator said on Thursday.
Efforts by several nations to hold down their currencies to prop up exports and growth and the US Federal Reserve’s bond-buying spree blamed for the dollar’s weakening have spurred fresh calls for coordination of national policies.
But Montek Singh Ahluwalia told Reuters nations needed to be realistic in their expectations of what could be achieved.
“The real issue is given that it is a problem, how do we coordinate policy? I don’t think you should be too demanding ... because such policy coordination has never been attempted before,” he said on the sidelines of a G-20 summit.
“I am hopeful we will get some agreement and I’m sure it will take time.”
Germany and several other nations have hit out at a US plan to consider setting specific limits on current account imbalances, while some countries, notably China, have come in for criticism for intervening in currency markets.
Commenting of the possibility of adopting numerical targets for current account surpluses and deficits in the summit’s final communique due on Friday, Ahluwalia said he did not think “that’s where the discussions are going.”
“As and when numbers are decided that has to be on the basis of some analytical work. Somebody has to do the exercise,” he said.
“We are handling a completely new set of things. So I don’t think one should expect an instant solution.”
Ahluwalia described the language of the communique as “reasonable,” but offering no quick fix for global economic imbalances.