U.S. Treasury Secretary Timothy Geithner says he will urge his G20 counterparts to agree on better rules to regulate currency exchange rates when they meet later this week in South Korea.
Fears of a "currency war," in which countries devalue their currencies to gain a trade advantage, have dominated headlines ahead of the meetings Friday and Saturday in Gyeongju. Deputy finance ministers from the 20 leading economies that make up the Group of 20 are meeting there Thursday.
Dow Jones newswires reports that a draft communique prepared for the meeting calls for member countries to "refrain from competitive devaluation."
Geithner has dismissed fears of a currency war. But in a Wall Street Journal interview published Thursday, he says the United States "would like countries to move toward a set of norms on exchange rate policy."
Geithner also says in the interview that he will press the G20 ministers to "rebalance" the world economy so that other countries rely less for their prosperity on exporting goods to the United States.
He draws a distinction between countries whose currencies are "undervalued by any measure" -- an apparent reference to China -- and those that intervene in currency markets simply to reduce the risk of asset bubbles and inflation.
He says that if China sustains the rate of appreciation of its currency of the past two months, it would help to correct the problem. He adds that will be easier for China to appreciate its currency if it knows other emerging-market countries will move with it.
Geithner also says he hopes to reassure the other ministers that the United States does not aim to solve its own economic problems by devaluing the dollar.
Some information for this report was provided by AFP.
